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Succession planning and business transfer

Some 65 per cent of private firms in the UK are family owned. However, fewer than half of first-generation family businesses have succession plans.

Common reasons include resistance by the owner to let go of the reins, fear of retirement or inability to find or choose an effective successor.

Transferring ownership can be highly emotional and complicated, which is why often it is ignored until it becomes a pressing issue, for example, when the owner becomes ill or too old to carry on running the business.

Often, business owners are busy dealing with day-to-day issues and consequently end up failing to attach enough importance to planning succession.

What is at stake

Leaving succession planning until the last minute is likely to mean effective transferral of ownership is not possible within the necessary time frame. A forced, ill-informed or panic decision could mean the business is transferred into reluctant or unqualified hands.

The business could be severely disrupted as conflicts take place over who should own or run the business, while uncertainty and lack of leadership could have a disastrous effect on sales and morale within the business.

All of the above could ultimately result in the failure of the business. Setting aside sufficient time to think and formulate an effective succession plan is an important key to success.

The benefits of getting it right

An effective succession plan should form part of your overall business development strategy.

Knowing exactly how, when and to whom ownership will be transferred is the most likely way to maximise your returns.

Choosing the right successor and the right time to transfer the business is the best way to ensure the ongoing success of the business.

Our interactive tool can help you identify the most suitable exit options for you. It also explains what actions you need to take next and points to sources of help and advice. See the page in this guide - which succession planning options should I consider? 

Subjects covered in this guide

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Home

 

Buy or sell a business

Transferring your business

 

Succession planning and business transfer

 

 

Introduction

Current section

Why succession planning is important

 

Assessing your options

 

Keeping it in the family

 

Transferring ownership to a non-family member

 

Trade sales

 

Voluntary liquidation

 

Have a formal succession plan

 

Here's how I successfully took over a family business (Flash video)

 

Which succession planning options should I consider?