One factor increasingly determines whether a business thrives or fades: succession planning.
The strength of our region’s future depends on how well we prepare the next generation of leaders to run and grow the businesses that drive local jobs, capital and community investment. Succession is not a retirement decision, it’s a resilience strategy.
A Regional Shift: The Succession Gap in Southeast Louisiana
In markets like New Orleans, many business owners are nearing or over the age of 65 and are beginning to make decisions about the future of their companies. While these decisions typically lead to financial milestones, they can also raise questions based on transfer of ownership or leadership: Will these companies retain their local character? Will they continue to support the same workforce and community causes? Will they bank locally?
Why Succession Planning Is Economic Resilience
Succession is not just about who signs the paychecks, it’s about ensuring a company’s leadership, capital access and business strategy endure in a time of change. When our commercial banking team evaluates credit opportunities for middle-market companies we look beyond financial statements. We ask: Who is running this business? Do they have the experience, leadership and vision to drive future growth?
We want to see that existing leadership is actively mentoring the next generation—not just choosing a successor but preparing them. In our experience that transition is more successful when a banker, CPA and attorney are brought to the table early. Business owners should ask themselves:
- Who in the company could realistically take over?
- Have they been trained, coached and tested in leadership roles?
- Do they understand how to work with lenders, manage cash flow and sustain operations through economic shifts?
We also work closely with our wealth management team to ensure that succession planning is aligned with the owner’s personal financial goals. A business exit should be a positive financial event, and it takes forethought to ensure the next generation isn’t burdened by debt or illiquidity.
What Happens When You Don’t Plan
The cost of not planning is real. One immediate risk is tax liability. Many owners underestimate the financial obligation that comes with a business sale or ownership transfer. Without proper planning a liquidity crunch can derail even the best intentions.
But longer-term risks are just as damaging. We’ve seen companies stall or shutter when the wrong person was tapped to lead or when a successor wasn’t empowered with decision-making authority. Simply writing down a plan isn’t enough. You must invest in the person, get the organization behind them and give them the tools they need to succeed.
A strong succession plan gives employees, vendors and bankers comfort. When everyone in the organization knows there’s a plan and they are clear on who will carry it out, that builds confidence and encourages people to root for that person’s success.
Succession Is Personal—and Relational
Succession planning is never a one-hour conversation. It takes honest reflection, long-term thinking and frequent touchpoints. As bankers we take pride in building those relationships over time. We text, call and meet for coffee. That kind of ongoing dialogue helps us understand not just the numbers but the people running the business.
As my grandfather—a business owner himself—once told me, “No matter how much the world changes, people still want to do business with people.” He lived to 97 and ran an international company through waves of economic and technological change. His legacy reminds me that human relationships are the foundation of business success—and succession is one of the most human processes there is.
Keys to a Resilient Succession Plan
Based on our work with businesses across Southeast Louisiana, here are a few takeaways for C-suite leaders preparing for succession:
- Start early. The earlier you start thinking about transition, the more options you have.
- Identify and invest in the right people. Whether family or non-family, the successor needs real leadership development.
- Build your advisor team. A trusted attorney, CPA and banker can help shape your legal, financial and personal plans.
- Know your company’s true value. Too many owners guess at value instead of getting a professional valuation.
- Consider your lifestyle goals. What do you want after the transition—more time, travel, philanthropy, passive income? Align your business exit with your personal vision.
- Involve your bank. Your banker should be comfortable with the transition and involved early enough to ensure it works from a financial and operational standpoint.
Liz Hefler is the Greater New Orleans regional president of Hancock Whitney. She may be reached via email at elizabeth.hefler@hancockwhitney.com.
