Frank Lesselyong
Associate Vice President, Employee Health & Benefits
A costly pattern is emerging across the middle market: companies wait too long to prepare for the inevitable.
Topics such as business succession, estate planning, and protecting key executives are typically reserved for Fortune 500 boardrooms, not companies with revenues ranging from $10 million to $500 million. But for mid-sized businesses, the need is just as essential and more urgent.
These firms are the backbone of the American economy. They drive innovation, create jobs, and fuel local communities. Yet many operate without a formal plan for leadership transitions, liquidity events, or the sudden loss of a key executive.
It can be a risky game, and the stakes are high, which raises the question: How are the strongest businesses planning for the future?
Business planning: Preparing for what comes next
Owner dependency is one of the quietest risks in business. Many privately held companies rely heavily on one or two individuals—typically the founder or CEO—to carry the enterprise's operational, relational, and financial weight. Without a plan to transition leadership, whether due to retirement, illness, or an unsolicited buyout, companies are left vulnerable.
Still, many owners delay planning. Letting go of control, imagining the business without them, or facing questions about succession may be uncomfortable. But the cost of avoidance can be significant.
True business planning is less about walking away and more about building a sustainable structure for the future. It outlines ownership transition, governance, funding strategies, and continuity planning. It aligns legal, tax, and financial considerations so that stakeholders are ready when the time comes to sell, retire, or transfer the business.
Estate planning: Preserving your legacy
For owner-operators, personal and business wealth are often tightly intertwined. While estate planning plays a key role in tax efficiency, it also ensures that family members, partners, and employees are not left to navigate chaos during major transitions.
Effective estate strategies seamlessly integrate trust design, buy-sell agreements, insurance-backed liquidity, and philanthropic intent into a cohesive whole. Importantly, this communication process brings families and advisors to the same table.
A well-crafted estate plan can reduce the risk of disputes and make sure both the business and your loved ones are prepared for what comes next.
Executive protection: Safeguarding the people behind the plan
Many middle-market companies rely on a handful of executives whose leadership, relationships and industry knowledge are essential to business performance. This dependence creates a vulnerability known as key person syndrome, where the sudden exit of a single person, whether due to illness, death or defection, can disrupt operations and affect enterprise value.
Addressing that risk starts with the right protection strategies. Tools like disability and key person life insurance, non-qualified deferred compensation plans and executive carve-outs become strategic imperatives. These solutions help attract and retain top talent while providing financial buffers against unexpected losses. The cost of not having them can be far-reaching.
The time to plan is now.
Companies that embrace early planning may have more options when deciding whether to sell on their own terms, transfer ownership to family, or reward those who helped build the business.
It’s time for the middle market to treat these issues not as afterthoughts, but as essential components of long-term planning.
Connect with a Marsh McLennan Agency advisor to protect what you’ve built and position your firm to grow, transition and leave a lasting legacy.
