Plan early and consider options for succession

Succession planning can be a complex and time-consuming process, so it is important for business owners to start planning as early as possible.

How prepared are business owners for success through succession?

The level of preparedness for succession planning varies among business owners.

While some have been considering an exit for a considerable time, many are impacted by a single event, such as illness, a realisation which creates an immediate pressure to find a solution. When it comes to succession planning, starting early is important to shape the business to ensure a smooth, successful transition.

Why do business owners put off succession planning?

Retirement and succession planning can be a significant topic to contemplate. A lack of clarity in respect of what you want to achieve: financial security, sustainability of the business, security for staff, often results in owners procrastinating.

What ensures a smooth process?

Starting early and being clear about what you want to achieve is essential to ensure a successful transition, whether through trade sale, management buyout or sale to an employee ownership trust.

We advise that business owners engage with an advisor, ideally two years in advance of a transaction. This allows the business time to implement controls and policies to ensure the value is maximised. Issues to consider include ensuring key contracts are in place, ensuring working capital is managed effectively, improving profitability or strengthening the management team if needed.