Succession & Exit Strategy

  • Do you have a Business exit strategy?
  • Do you think of it as you do a Will – “I don’t need that just yet. Do I?”

Succession planning is often overlooked by business owners until they want to retire or, just dispose of the business. If you are one of those who have not planned for this inevitable eventuality you may find a host of problems that make your exit harder to achieve or less financially beneficial than it should be.

Did you think about your business exit strategy at the time that you started your businesses? No? Well call us now and plan for your future before it is too late to maximise the benefits available to you when you make your exit!

If you have a Business Plan this should include your exit strategy and a Management Succession Plan. This should be reviewed regularly to make sure that it takes account of changes in your business.

Business Exit Strategy & Management Succession Plan

You know you want to retire so plan for it just as you do when setting up a Pension Plan. Get advice from us and Financial Advisers as to how your business could provide that pension.

Business conflicts

As is the case with romantic or, family relationships the romance of being in business together can wear off and tensions can cause splits that can be costly if not healed. At the outset you and your business partners will have had shared goals and objectives but, as the business evolved, issues and conflicts may have arisen. These need to be resolved whether or not you are planning an exit:

  • how is your business structured
  • who owns what
  • what type of shares have been issued
  • what Agreements regulate the positions of the business owners in dispute

These are all matters that need to be looked at when a dispute arises and cannot be resolved. First, you should work on resolving the issues – Mediation may be the solution. A Business Coach may be able to help you. Then, if you have tried everything but been unable to resolve the conflict then one, or all, of you may need or, want to exit the business. This process is much like a divorce and can be as messy as a divorce if you haven’t planned your exit strategy.

Shareholder Agreements – Partnership Agreements

Partners may not always agree, or may develop competing priorities for themselves or, the business. You should therefore have a documented process for dealing with such situations and the fall out from them. Your Shareholder Agreements or Partnership Agreement should provide for how these situations are to be resolved. Whatever your business structure make sure that, at least, you have a clear and agreed written process setting out how you will resolve disputes, and exit or dissolve the business.

Remember that Partnership disputes drain time, energy and resources and are best resolved as quickly and amicably as possible. Do not wait until you are involved in one – plan for that possibility at the outset.

Illness or Disability

Health issues are always a consideration and if your health becomes a factor then you need to find a way to exit or, at least take a break from work. Have you got an Insurance Policy covering illness or disability that might require you to be absent from your business temporarily or, permanently?

  • Have you got a Management Succession Plan?
  • Who are you training to step into your shoes?


None of us plan on dying but sadly we will! What will happen to your business if you die? Part of the plan must be to have in place a life insurance policy made out to the business especially if you it is to continue without you and a ‘keyman’ Insurance Policy is also worth arranging. The definition of key personnel is an individual(s) whose injury or death would have a significant impact on the running of the business.

Selling a profitable business

If you’ve made a success of your business then, you will want to sell while you can get a good price. Let us recommend a professional Firm to value your business. You should draw up a Plan showing projections for the next three to five years to show to prospective buyers.

Selling an unprofitable business

The reality is that if your business is unprofitable it will be a challenge to sell it, no matter how much you want to exit from it. A Business Valuation will still be required along with a Prospectus explaining why you believe someone else could make the business more profitable – it maybe that cash investment is all that is needed.

So let us help you plan for your life after business! You need to

  • Review your Business Plan & Management Succession Plan annually
  • Ensure you have taken financial advice to maximise your return when you exit the business and minimise your Tax and other liabilities
  • Ensure that appropriate Shareholders Agreements are in place or that the Articles of Association of the Company are appropriate and sufficient
  • Ensure that you have an up to date and effective Partnership Agreement
  • Ensure that your legal requirements regarding your workforce are properly met
  • Ensuring that the administrative side of your business is efficient
  • Ensuring that your company has effective Terms & Conditions
  • Liaising with your Accountant and Financial Advisers to ensure that appropriate arrangements are put in place to finance an exit or succession
  • Check your position in relation to any personal liability you may have under Leases, Licences, Guarantees etc