“Are you going to be here for a while?”
That simple question in 2012 about signing a new lease for office space was just the beginning. The decade that followed brought about a thoughtful succession plan that led to NetPlus Alliance Founder Dan Judge’s eventual, well-deserved retirement and now-President & CEO Jennifer Murphy’s passionate leadership.
Succession planning is critical for any business owner, whether retirement is around the corner or decades away. Without an effective plan, businesses that are entirely dependent on their leader for day-to-day operations will falter when it comes time for that person to take a step back.
NetPlus is partnering with NAVIX Consultants for an exclusive educational series in the fall of 2025 focused on effective succession planning. The series will include two webinars and one in-person session to cover every step of the process. With expert guidance, we aim to give our members the tools and best practices they need to confidently execute a leadership transition.
"Likely more than 50% of the businesses in NetPlus have an owner who is the number one salesperson, deeply embedded in the business every single day,” Jennifer said. “If you're in your 30s or 40s, that's OK. But if you're in your 50s or 60s and that's still you, that's a problem. At that point, the business depends on you as its most valuable asset. If you want to step back or transition, it will be difficult because the business can’t function without you.”
The good news is, the NetPlus team has firsthand experience navigating this transition and is prepared to help guide our members to successful succession planning that fits their unique needs and circumstances.
Steps for a Successful Succession
Despite differences between individual businesses, there are generally three potential paths forward when it’s time to retire: pass it on to family, entrust it to employees, or sell to an outside individual or company. All these roads take time and careful planning to be effective. No option is particularly easy, but they can all be made more manageable with the right guidance and an appropriate timeline.
No matter the right path, there are four basic steps to pulling off an effective succession plan.
- Do your research
In addition to taking advantage of the NAVIX education series built for NetPlus members, start by reading articles, watching videos, listening to podcasts, and speaking with other business leaders you trust on the topic. Find answers to some of your questions, discover pieces you hadn’t considered, and keep lists of what you still need more information about. Get a basic grasp on the process so you can find the right experts and ask the right questions to guide you through the process. - Hire expert consultants
Transitioning ownership of a company is a complicated endeavor, so it’s critical to have the right partners. Find experts to support your transition and help you navigate the legal, financial, operational, and interpersonal aspects of a succession plan. Lean on trusted consultants of your choosing to do the right things right and get you to your retirement with confidence. To help kickstart this step, NAVIX has generously offered a complimentary 30-minute private consultation for NetPlus members who participate in all three parts of their 2025 educational series — including the in-person session at the Annual Meeting. - Identify the right path
With your professional guidance, decide which path is right for you. If you have one or more family members involved in or are interested in the business, determine if that is a good fit. If you don’t, consider if you have one or more employees who might be interested in and capable of taking over the business. If neither is a good option for your situation, consider selling options that would secure the longevity of the business, if that’s important to you. - Prepare your successor
Regardless of your path forward, the final step will be preparing for and completing the actual succession. A good best practice is to have accurate, updated job descriptions, and to make sure your team is cross trained. In the event that one person cannot fulfill their role, another person can step in and execute that responsibility — this is especially important for your leadership team. You will want a contingency plan for the “What if I was suddenly gone?” possibility. This can be a simple document that names your key legal and financial contacts and specifies who will step up to lead in your absence. It also identifies other individuals that would step up into new roles, as well. Be sure that this is documented and shared with the leadership team and that your lawyer or accountant has a copy.
This preparation stage may take years to do well, particularly if your successor needs more time to gain experience or prepare financially. For this reason, it’s best to start succession planning before you’re ready to retire. If you hold off until you’ve already had enough, you’ll hang on longer than you’d like or you’ll rush the process and the business will face repercussions after you’ve gone.
There will inevitably be differences in identifying and preparing your successor depending on which route you take.
Family Business
NetPlus Alliance is a fifth-generation family business with a legacy of succession plans that have led us to where we are today. The company which started as a general line industrial distributor called Ward Brothers Mill Supply Co., has evolved over 140 years into the buying group business it is today.
One of the primary pitfalls Dan said he notices in less successful succession plans is when a company is left equally to too many people. That almost always leads to additional complications, he advised. It’s usually an attempt to avoid conflict at the beginning, but often leads to greater conflict down the line.
“The three original Ward brothers gave majority control of the business to one guy, Sam Ward, Jr.” said Dan, explaining the early days of his family’s legacy. They kept clear and decisive lines in their succession. Minority shares went to Dan’s father and uncle, who were both involved in the business and 20 years Sam's senior. Ultimately, those two men were also ready for their exits, and Sam bought their shares of the company. When Dan began to rise within the company, Sam brought him into part ownership. Following the sale of Ward Brothers Sam gifted the rest of the company ownership to Dan. Dan, in turn, did the same for his daughter, Jennifer, when it was time.
“The family dynamics of succession planning can get pretty complicated,” he admitted. “I was lucky. I only had two daughters.” While many families may choose to pass their business on to their children or relatives evenly, Dan had the inclination to pass the business down to one child in a straightforward way, while providing for his second child who was excelling on a different career path in another way.
“The more family members that are involved, the more complicated it's going to be." That’s why, he reasoned, it’s imperative to have expert consultants you trust in your corner, who are personally removed from the situation.
In 2006, Jennifer brought her honed marketing experience to NetPlus Alliance. In those six years she worked at NetPlus before he asked, “Are you going to be here for a while?” Jennifer proved her tenacity, leadership, and passion for the business, building relationships across the industry, and taking on greater responsibility. Little did she know, he had been quietly preparing her to take over the company piece by piece. By the time he posed that question in 2012, she was ready to accept.
“She came to me with an opportunity she had found; basically a whole year of learning how to run a business,” Dan recalled. Jennifer was working through a program with The University at Buffalo School of Management's Center for Entrepreneurial Leadership. “At the same time, I was going to Florida for the winters and was kind of back and forth. I was ready to find somebody to run the business."
By 2013, Jennifer was named President, and the company was completing a valuation. Over the course of the next decade, they worked through transferring not just company stock, but industry knowledge, connections, and titles. Jennifer officially became President & CEO, with ownership of NetPlus Alliance in 2021.
“If you’re in a family business, it's in your blood,” Jennifer said. “If you're an entrepreneur and run your own company, you have to be tireless, you have to be selfless, you have to lead with conviction and put your employees’ needs ahead of yours every single day.” Those are the types of qualities a leader has to look for in their organization — family or otherwise. After all, a business doesn’t have just one type of leader. Owners should be nurturing leaders across the organization to take on different roles.
“Even if you had two children working in your business, one would be more clearly the leader than the other,” she continued. “You have to watch what their strengths are and put them into the right positions in a company. Maybe they're both equal owners, but one will rise up to be President and the other might be Chief Financial Officer or Operations or General Manager or the top outside salesperson.” The decision should be tailored to each business and recognizing who rises to the occasion.
If you don’t have a family member of the next generation interested in taking over your business, however, you may wish to tap an employee that holds that same entrepreneurial spirit and love for the company and its people.
Employee Interest
An owner should always have up to three people they’re grooming for different aspects of company leadership, Dan suggests. Provide training, continuing education, intentional mentorship, and leadership training. When you’re ready to pass on the business you’ve built your life around, you want to know it will be in good hands.
At this stage, you can propose the idea to an employee you already trust with leadership within your company. When you find the right person who wants to take on the functional and financial responsibilities of owning a business, take the time to build out a transition plan alongside your successor with guidance from your succession advisors.
Perhaps the leader or leaders you’ve prepared have the skills they need to run the show but aren’t positioned to accept the fiscal responsibility of solo or small group ownership. An Employee Stock Ownership Plan (ESOP) may be an option to consider, if that is feasible.
In any case, an owner wants to get their equity out of the business in in some fashion when they’re ready to take a step back. If you have neither family nor protégé to sell the business to, it may be time to look outside of the organization.
Outside Buyer
An outside buyer could be an individual or another company. In a similar manner to how you may have approached one of your employees, you could find an industry connection who is looking for an opportunity to lead and bring them into your company to begin a transition that way.
Should all that fail — or if this is simply your preference — you may consider a merger and acquisition (M&A) option. A large distributor or private equity company could be interested in purchasing a company with $50-100 million in sales. There are also options, however, for smaller distributors of say $10 million in sales.
NetPlus is a network of hundreds of likeminded small to mid-sized distributors across the U.S. Many of your fellow members are looking for opportunities to expand either geographically or into new categories or services. Reach out to the NetPlus team if this is your situation. There are almost always members looking to buy or sell who simply need to find the right solution. Let us connect you with businesses we are familiar with and can continue to support once you’re enjoying retirement.
“Bringing this opportunity to the attention of NetPlus gives owners more of a close-knit ecosystem to be able to look for opportunities to buy or sell,” Jennifer said. It would be an alternative or supplemental step to working with an M&A adviser. NetPlus would not be involved in the buying or selling but could act in a “matchmaker” type role, helping to facilitate the business relationship rather than the business itself.
In any iteration of selling your business, it’s important to prepare for culture changes. With new leadership of any kind there will be waves of impact beyond ownership. But with a properly prepared team, you’re giving the business you poured your life into its best chance to thrive.
A Trusted Guide
When you’re ready to start planning for retirement, you’ll want expert consultants who can guide you through the process and ensure the ultimate success of your business. For NetPlus, that guide was NAVIX Consultants.
“Succession planning is more than just doing a valuation,” Jennifer said. “The exciting part about working with NAVIX is that they provide you with very simple tools.” Their assessment tools help owners and successors to determine their preparedness and identify gaps they need to fill to complete a successful transition. The assessment isn’t designed to scare off owners who are looking for their exit, but to support a succession plan that will safeguard their legacy.
The NAVIX assessment is “eye-opening,” Jennifer remembered. “When I did it for the first time, I got a very low score, but I still have it and am improving. I go back to it once a year and continue to work on the changes that are necessary to build what NAVIX calls “transferrable value.” The assessment invites you to examine questions like:
- Is there a clear successor CEO?
- Are there significant holes in the current leadership team?
- Can they make impactful decisions without the direct input of the owner?
- Are the right people in the right roles?
- Is there any individual who would significantly disrupt business if they left?
NAVIX hosted a webinar for NetPlus back in 2022. Something NetPlus leadership learned and works hard to maintain is this: Good leaders make themselves irrelevant to the business. Many CEOs have a hard time separating themselves from the day-to-day work. But they challenged our community by saying, “Everybody always says that they have the best team. Can they prove it? Can they follow a process without you?”
You’ve taken pains to put your team together. Trust them to know their business and get it done. When it’s time to retire and hand it off entirely, you can rest assured they’re ready to take on the challenge and succeed. It can be difficult to step away when you love what you do, but you have to see what the team can do without you and realize there will be good surprises along with bad surprises.
