Whether you’re a shareholder or a business leader, it’s crucial to plan for succession. As the UK faces the threat of a recession and continues to emerge from the pandemic, the long-term direction of the business should be high up on the agenda to ensure future proofing, as well as strategic continuity.
Despite this, succession planning can often be an overlooked topic. The pandemic has had a far-reaching impact, with more than two years of disrupted business, unpredictability, staffing challenges, supply-chain issues and negative implications for business funding. In our recent SME Barometer report, over a third of SMEs indicated they are pushing back plans to sell or retire. Properly preparing your business for the future will allow you to maximise the value that you have built up, reduce unexpected tax liabilities, and realise a fair return for the hard work that you, your employees and stakeholders have put in. However, in our experience, this value can be eroded significantly if the business hasn’t been prepared for sale or exit at a sufficiently early stage. Implementing a robust succession plan, demonstrable resilience plan and implementation timeline are crucial initiatives, requiring a focus on change management, communication and cultural alignment that must be actively managed. It’s imperative that you consider your options before you are forced to or are facing a distressed situation. It is never premature to be thinking about the future proofing of your business and its longevity. Over the next couple of months, we are going to be rolling out a series of insights on the topic of succession and the steps you can take to get prepared for any possible transition. The series will look at some of the various succession options available, including management buyouts (MBOs), employee ownership trusts (EOTs), sales to a third party and employee share incentive schemes, to help you in considering the best options for your business.