Exit & Succession Planning
There comes a time in the development of many privately owned businesses when the shareholders want to realise the value of the business they have built or possibly to pass the business on intact to the next generation.
For owner managers, successful succession planning is crucial if your business is to retain its true value when you step back or sell out.
Our exit strategy review offers a carefully tailored review of all of the exit options available to the owners including trade sale, management buy-out/ buy-in and full or partial family succession.
Owner managed businesses account for some 70 per cent of UK companies, yet only about 25 per cent survive the transition to the second generation and less that 15per cent to the third. Failure to plan for family succession is often cited as the main cause.
When the owner manager retires, the business often underperforms and loses value because the new owners are unprepared or unsuited to a management role.
Most successful exit plans are prepared early – we recommend starting 2 to 3 years before the owners target exit date. We can then establish both a current and a potential exit value and work alongside the business, to achieve a sustainable growth in value.
Our effective succession planning guidance helps to minimise the potential threat to a business from the inevitable change in management or ownership.
Our wide-ranging experience shows that issues of family ownership and succession planning must be carefully thought out, long before retirement. Our experts can help to make sure this is professionally and thoroughly addressed.
We can also work with specialists, who can provide coaching support to the management team, as they prepare for their new roles and to help the vendors think about life after the business.
We understand that the nature of owner-management means many businesses are so dependent on the owners that they struggle to function profitably without them. So we focus sharply on the first objective of any succession plan, which is to ensure that the company can flourish after the owners retire.
Even if the owner manager eventually sells out, a strong management team, ready to take up the reins will maximise the price, while also creating options for a management buyout. Our experience shows that a good team, managing a growing business is usually sufficient to attract debt or private equity funding for the buyout deal.
Our taxation advice ensures the value is realised in a tax efficient way and also addresses post-sale compliance issues, relating to income and inheritance tax planning.
For more information contact a member or our team below:
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MC Vanguard Corporate Finance is the trading name of MC Vanguard Corporate Finance Limited
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