By Anthony Nasca , Financial Advisor , CEPA , and Brad Stanek , CFP

For many boat dealership owners , the business is more than just a source of income , it ' s a legacy . And passing the business on to your children is a milestone that must be carefully planned . However , it can be easy for dealers to kick the can down the road , dealing with the challenges of the day versus planning proactively .

With that said , it can be sobering to hear that , according to the Exit Planning Institute , only 60 percent of businesses that are passed down to family are able to survive with the next generation . How do you flip those odds in your favor ?

Start by planning ahead

Many dealership owners underestimate the complexity of transferring ownership to family members . Without proper planning and open communication , several risks emerge such as family conflicts , financial strains , operational disruptions and more .

These risks can lead to missed opportunities and , without a structured plan , your children may not be fully prepared to take over , leading to inefficiencies or lost business value . By taking proactive steps , you can ensure that your dealership remains strong for years to come .

Step 1 : Identify the right successor

Not every child is ready or interested in taking over the dealership . Open and honest conversations are crucial to understanding their goals , strengths and commitment . If multiple children are involved , consider how roles will be divided . Will one take charge ? Will siblings co-manage , and if so , how will decisions be made ? These questions should be addressed early to avoid tension later . We found it often makes sense to have each family member involved share their goals , values and needs individually and anonymously - then bring the family together as a group to create one shared vision .

Step 2 : Develop a transition timeline

Once the shared vision is created , a well-structured succession plan should span several years . Gradual transitions allow your successor to gain experience under your guidance . A typical timeline may be :

3-5 Years Out : Identify successors , create a leadership development plan , and introduce them to key financial and operational aspects of the business .

2-3 Years Out : Begin transferring decision-making responsibilities , involving them in major strategic discussions .

1 Year Out : Implement formal ownership transition steps , such as stock transfers , legal agreements , and tax-efficient wealth strategies .

Final Handover : Fully step back , ensuring your successor has the confidence and ability to lead .

Step 3 : Structure the ownership transfer

There are several ways to transfer ownership , each with different financial and tax implications :

Gifting Shares Over Time : Reduces estate tax exposure while gradually transitioning control .

Selling to Family at a Discounted Rate : Allows for owner fi- nancing or gradual payments .

Using a Buy-Sell Agreement : Sets clear terms for the transition and protects both generations .

Creating a Family Trust : Ensures long-term financial security while maintaining business oversight .

Each method has pros and cons , so it ' s critical to have a team , including your financial planner , accountant and attorney , working together to build out a customized approach for your family ' s needs .

Step 4 : Prepare the business financially

A smooth transition isn ' t just about legal documents . It ' s also about fi- nancial readiness . Conduct a business valuation to determine the dealership ' s value . You may also need to restructure the company ' s finances to improve cash flow and minimize tax liabilities during the transfer .

Additionally , consider your personal financial security . If you plan to rely on the dealership for retirement income , you ' ll need a well-structured compensation or buyout plan .

Step 5 : Communicate with key stakeholders

Beyond your family , your dealership has employees , plus relationships with manufacturers , lenders and customers who rely on strong leadership . A well-communicated transition plan reassures them the business will remain stable . Gradually introduce your successor to these stakeholders , positioning them as the future of the company .

Conclusion : The time to start is now

Succession planning is a long-term strategy that protects both your family ' s legacy and your business ' s future . By planning ahead , you can avoid costly mistakes , reduce stress , and ensure that your boat dealership thrives under the next generation ' s leadership .

Ultimately , dealers must prioritize exit planning to protect their legacy , secure their financial future , and ensure the continued success of their dealership and their personal financial well-being .

With the right approach , dealers can navigate the uncertainties of exit planning and achieve a favorable outcome that aligns with their personal and financial goals . To help build out this plan , our team offers a complimentary service , the Second Opinion Service , a 360-degree review of your dealership and personal financial situation .

Anthony Nasca , CEPA ( anthony . nasca @ ms . com ), is a certified exit planning advisor and and financial advisor with the Stanek-Haack Group at Morgan Stanley in Chicago , and Brad Stanek ( brad . stanek @ ms . com ), is an executive director and financial advisor with The Stanek-Haack Group at Morgan Stanley in Chicago .

www . boatingindustry . com march / april 2025

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