Succession planning: 24% of OMBs plan to review their succession plans in 2018

Our latest owner managed business report ‘Powered by people and technology in 2018’ finds that less than a quarter (24%) of owner managers are 'certain' or 'very likely' to review their succession plans in 2018, down from 29% in 2017.  

It would be easy to attribute this decrease to uncertainty around Brexit, or nervousness around a potential snap general election, but the reality is that no matter the political or economic climate, it makes sense to plan early for succession. 

Here are some of the key points for you to consider when planning for the future of your business: 

Valuation, valuation, valuation

If you’re favouring a sale and exit from the business, it makes sense to get an idea of how potential purchasers may value your business. On the other hand, if you're planning to give value away to the next generation, a valuation will help you know the likely value of your gift and plan accordingly. 

Seek advice early from tax specialists

For owner managers, a likely value driver will be your eligibility for tax reliefs – such as Entrepreneurs’ Relief. Make sure you don’t miss out on these reliefs by failing to plan ahead, or by making minor changes to your business that can impact eligibility. Tax planning doesn’t end when you sell or gift your business to the next generation, so you’ll need to consider how you want to invest or protect any cash proceeds in a tax-efficient manner.

Give your business a thorough healthcheck​

Make sure that any disputes are settled with suppliers, customers, employees or HMRC. This will ensure your business is in the best position to be sold, gifted or wound up in a timely and efficient manner. If there are any gaps in your management team, these should be addressed, and you should make sure that your accounting and tax records are in good order.

Consider simplification of dormant or duplicate entities within a group

Restructuring or corporate simplification gives vendors peace of mind that no outstanding risks or liabilities remain, and can significantly increase the value and attractiveness of your business by releasing capital, reducing costs and wasted management time. 

From a potential buyers perspective, a streamlined group of companies is more attractive and, in common with the vendor, offers peace of mind that care has been taken by the vendor to mitigate any potential risks or tax liabilities.

Working with you​

It’s important to know all of the options available up front, and work with advisers who can not only manage the process on your behalf, but can advise you on any arisks and opportunities that may lie ahead. 

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 you and your business. 

For further information on the options available and to read our case studies that illustrate the areas in which we are able to provide support, please download our brochure here.

To find out more, or to arrange an initial meeting, please contact Mark Baycroft.

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