Thousands of business owners across Southern California are approaching retirement age. Many have spent 30, 40, or even 50 years building successful companies that have provided financial security for themselves and their families.
Yet some are overlooking one of the most important decisions they will ever make: what happens to their business when they are no longer there to run it?
Daniel Fieman, founder of Build It Backwards Consulting and an author and expert in strategy, leadership, finance, and succession planning, believes business owners should begin preparing long before they expect to retire.
"You should have started your succession planning yesterday," Fieman advises.
According to Fieman, effective succession planning involves five phases:
Preparation: Assemble the appropriate planning team, establish objectives, and define the desired outcome.
Identification: Determine critical leadership positions and identify the qualifications required to fill them.
Analysis: Evaluate potential successors, identifying their strengths, weaknesses, and development needs.
Development: Provide future leaders with the training, experience, and responsibilities necessary to prepare them for leadership.
Implementation and Evaluation: Execute the succession plan, monitor progress, and make adjustments as circumstances change.
Although a succession strategy can often be developed relatively quickly, preparing future leaders may require several years.
Protecting the Value of a Lifetime's Work
Succession planning can also have a direct impact on business valuation.
Prospective buyers generally favor companies with capable management teams, reliable financial statements, documented operating procedures, and effective internal controls.
Most importantly, buyers want confidence that a company can continue operating successfully without depending entirely on its founder.
A business that functions independently of its owner may attract more potential buyers and command a higher selling price.
For many entrepreneurs, their business represents their largest financial asset. Failing to prepare for an eventual ownership transition can therefore threaten not only the company's future but also the owner's retirement security and family wealth.
Ultimately, every business owner will leave the company, whether through retirement, illness, disability, or death.
As Fieman emphasizes, the best time to begin succession planning was yesterday. The second-best time is today.
The consequences of inadequate succession planning can be substantial, potentially reducing a company's value, disrupting operations, and jeopardizing the owner's financial legacy.
A Growing Problem Among Small Businesses
The automotive repair industry provides an example of the challenges facing aging business owners.
One Southern California automotive repair company, Orozco’s Auto Service, has been acquiring independently owned shops throughout southern Los Angeles County and northern Orange County. The company currently operates eight locations and plans to acquire another 20 to 30 over the next decade.
The strategy is driven partly by the automotive repair industry's highly fragmented ownership structure. According to a Better Business Bureau industry report based on IBISWorld data, six major automotive repair companies collectively accounted for just 7.12% of industry revenue in 2022.
The age of existing owners presents another significant challenge. According to the 2025 Ratchet+Wrench Industry Report, 45% of surveyed automotive repair industry professionals were age 60 or older, including 13% who were at least 70. With 81% of respondents identifying as business owners or senior executives, the findings underscore the importance of succession planning in an industry where many experienced operators are approaching or have already reached traditional retirement age.
However, succession planning is not simply about choosing a retirement date. It involves determining the company's future ownership and ensuring that capable leadership is available to manage the business.
Owners must consider whether the company will be sold to an outside buyer, transferred to family members, acquired by employees, or transitioned through another ownership arrangement.
Each alternative requires preparation, sometimes years before the actual transition.
Michael Manahan is a professor of accounting and finance at California State University, Dominguez Hills, where he has taught for almost 20 years. He is also a speaker and consultant. He is the author of several books, including his latest, You Too Can Retire Rich.
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