Succession planning for business owners
Succession planning refers to preparations for handing over control to somebody else when you retire or otherwise cease to be actively involved in the running of your business.
To build a sound succession plan you need to decide who will take over as the head of the company after you leave and make sure the legal and financial framework is in place to make that happen at the right time, in the right way.
In practice, this usually means some sort of sale agreement. Typically, you might agree to:
- sell your interest in the business to an existing co-owner
- pass it on or sell it to a member of your family
- or sell it to a trusted employee.
If there is no obvious successor in any of those categories, you might seek an outside buyer who you feel you can trust to continue your legacy and who will pay what the business is worth.
Pitfalls of succession planning
Succession can often be emotional and difficult to manage.
You’ve invested a lot in your business, you don’t want just anyone taking over and damaging your legacy.
At the same time, it often involves family which can sometimes mean tough decisions and difficult conversations.
Rooting everything in numbers, process and best practice can help make all of this less difficult. And the more transparent decision-making is, the less likely communication problems or disputes.
However or whenever you exit the business, putting the wheels in motion as early as possible is good sense.
It means that things will run as smoothly as possible when the time comes, even in the worst-case scenario of sudden death or incapacity.
Even if your retirement and old-age feels a long way off, it’s never too soon to start planning. And knowing you have a plan in place neutralises that background worry, freeing you up to focus on the here and now, and achieving growth.
Our succession planning service
Almar provides a comprehensive personal and business financial planning
service which includes:
- Capital gains tax advice – ensuring that the complex interactions of CGT and inheritance tax are taken into account to minimise any CGT bill on disposal of assets.
- Advice on wills – guidance on preparing a will or will trust that will protect your business and assets from unnecessary inheritance tax.
- Counsel on exit options – which will work best for you, your business and your family?
- Financial support for a sale – advice on preparing for a sale and preparation of financial data to support the process of selling up.
- Advice on lifetime gifts – a manage disposal of business assets and interests over a longer period to reduce the inheritance tax burden.
- Family trust arrangements – ensuring your family can benefit from the business while safeguarding its long-term viability.
Get in touch
To find out more about how our succession planning service can help you, call or email and one of our partners will be happy to talk through your situation.