[caption id="attachment_27466" align="alignright" width="389" caption="William Schrader, left, Dick Abbey and Jim Andersen"][/caption]

SANTA ROSA – At Burr Pilger Mayer’s fifth-annual succession planning conference, Will, Nancy and Karl Seppi of Costeaux French Bakery in Healdsburg talked about their experience with putting a successful succession process in place, and a panel of experts discussed the dos and don’ts of having a well-thought-out plan.

Steve Jannicelli of BPM monitored the panel, which consisted of Jim Andersen, partner with BPM and a succession planning expert; Dick Abbey, an attorney with Abbey Wietzenberg, Warren & Emery; and William Schrader, president and chief executive officer of Exchange Bank.

The event, which focused on how to move local family owned businesses from generation to generation, was held earlier this month at the Vintners Inn.

Initially, Will Seppi talked about his decision to leave the corporate world, where he was working in high-level positions, to come run the family bakery.

“I got burned out,” said the 35-year-old accountant.

Seeing that Sonoma County had changed in the years since he left and Healdsburg seemed to have come into its own, he thought he would give the bakery a shot.

“And it has been go, go, go ever since,” he said.

Karl and Nancy wanted to turn the business over to their children at some point, and Will was the only one who wanted to step in.

The most important element in navigating a successful succession is maintaining trust, Will said. While there were challenges often, he and his parents trusted each other.

“That determines how successful the succession will be,” he said.

Following is a summary of the comments and advice offered by the event panelists.


“You have a lawyer. You have an accountant. You have a banker. The person that is missing is the shrink,” he said of the emotional side of the succession planning process.

Both with the children and their relationships and with parents not wanting to feel left out in the cold, he said that bringing up all those things one doesn’t want to talk about proves to be a recipe for success.

Mr. Andersen stressed the point of not confusing the succession plan with estate plans and the valuation of the business.

“Look at the business on an annual basis and once you have a benchmark, every year put in a value for the next 12 months.”

He said the most important reason of all to have a succession plan is to preserve the relationships of the siblings after the older generation passes on.

“The last thing you want is for your kids to end up in court,” he said.

The valuation part of it is that you are leaving a legacy.

“There is a real value and a perceived value to the business, and without having annual meetings you will not know how to make some of those tough decisions.”

Mr. Andersen also stressed working closely with the younger generation.

“And if there is no way of splitting up the business, if you have to liquidate and leave the kids the proceeds to save their relationship, do it.”


“It is never too early to start on a succession plan but it is important to understand there is a difference between a business succession plan and an estate plan—even when the business is going to the same people that are heirs to the estate.

“You need to take a dispassionate assessment of the strengths and weaknesses of the people you are leaving your business to,” he said to a room full of small business owners.

“Paying attention to the capabilities, the willingness and the aptitude of your children will let you know who is best fit to take over the company, or if you want to consider grooming the business for a buyer,” he said.

And while many owners may have a succession plan in place, 67 percent have not implemented them, he said.

“Time and time again I meet with people and they say they have a plan, and when they show it to me it is not signed. It is not legal if it is not signed,” he said.

He said people all love their family members, and it is important to be honest and not try to make anyone do anything that they shouldn’t do or wouldn’t want to do.

One of the biggest mistakes people make, he said, is thinking “I have to leave it all to the kids because that is the only fair thing to do.”

And not having a proper buy-sell agreement in place can be a huge hindrance.

“What we talk about at the breakfast table in 2010 may be really different from what happens in 2015,” he said.

He said it is not all that complex and scary once it is put into place, but without a buy-sell agreement, nobody will know what happens to the company in the case of death, disability or divorce.

“Not too many people like to think or talk about this stuff, but it will make things much smoother down the road.”


“It is important to remember that there is no ‘one size fits all’ succession plan,” he said.

“You need to be in touch with your attorney, accountant and your banker,” he said. “How will the plan impact liquidity? You don’t want to smother the next generation in debt.”

Remember, too, he said, the “ownership is not necessarily leadership, and some people are more equipped to deal with a leadership role than others.”

He said that one of the biggest problems from his perspective is when the older generation doesn’t include the younger generation in the daily operations of the business.

“If there are vendors to deal with, will they give the new generation the same deals they gave the older one? Will they continue to sell to them? You lose the franchise if it doesn’t transfer to the next generation.”

He also talked about emotions.

“The business you create from a lifetime of work is an extension of the self,” he said. “To come to terms with succession is to come to terms with one’s own mortality.”