7 June 2017

Succession planning: considering the future of your business

With almost a third of SMEs considering succession planning in 2017, we set out the key things to think about when planning for the future of your business

Our latest annual UK-wide report ‘Strength amidst uncertainty in 2017: The SME view’ finds that almost a third (29% in the UK and 31% in Scotland) of SMEs are certain or very likely to review their succession plans during the course of this year, but many may not be aware of the full range of options available when considering the future of their business.

A failure to plan ahead could not only reduce the potential value of your business, but could lead to a loss of advantageous tax reliefs and expose you to unnecessary risks. It’s vital to think early on about what type of exit you want to achieve and, if selling your business, who you want to sell it to.

Detailed below are some of the key actions to consider when planning for the future of your business:

Establish how much your business is worth

If you’re favouring a sale and exit from the business, you can gain an idea of how potential purchasers may value your business. Alternatively, if you are planning to give value away to the next generation, a valuation will help you know the likely value of your gift and plan accordingly.

Take advice from tax planning and wealth management specialists

You could miss out on valuable tax reliefs simply by failing to plan in good time, or by making minor changes to your business. Tax planning does not always cease when you sell or hand on your business, so you may need to consider how you invest or protect any cash proceeds in a tax-efficient manner.

Put your business in the best position for succession

It goes without saying that settling any disputes with suppliers, customers, employees or HMRC is vital to ensuring your business is in the best position to be sold, gifted or wound up in a timely and efficient manner. Gaps in the management team should be addressed, and you should make sure that your accounting and tax records are in good order.
 

Consider restructuring and/or corporate simplification

Corporate simplification planning provides vendors with the comfort that no outstanding risks or liabilities remain, and can also significantly increase the value and attractiveness of your business.

Our experienced team can guide you through the options available, and manage the process on your behalf. We understand that the commercial and personal objectives of each business owner are unique, which is why we offer a free, confidential exploratory meeting to understand the challenges and opportunities facing your business.

For further information on the options available, or to arrange an initial meeting, please do not hestitate to contact Marc Shenken.

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