operational
exit planning: Perspectives on the big picture According to research by Legal & General, nearly 60% of family businesses in the UK don’t have a succession plan in place. It is often a task shelved for ‘some other time’, until it’s too late. It is important for business owners, therefore, to consider the ‘big picture’ when it comes to succession planning. Should a key director retire, or crucial personnel suddenly depart, how would your organisation cope? And how can you prepare in advance to minimise the impact on your business should this happen, whether expected or otherwise? Three succession planning experts, from Legal 500-rated law firm Willans LLP, run through the key considerations for business owners…
START EARLY from Chris Wills, partner & head of corporate & commercial “There are, fundamentally, two types of exit: one brought about through choice (a trade sale or listing, or perhaps a management buyout or family succession) and one brought about through necessity (death or incapacity, or another change of circumstances). This makes it essential for every business leader to give some thought to what a planned exit may look like and how they would hope that a forced exit might look, no matter what stage they are at
in the business lifecycle. Early planning coupled with appropriate professional advice will help any business leader to ease this process and maximise the potential (or minimise the impact) of any exit. “Exit planning can take three to five years, so having a target in mind as soon as possible will enable a business leader to put measures in place that can steer the business in the desired direction with maximum impact. No matter what exit route is most desirable, three key ingredients to success are to invest in appropriate professional advice; to communicate with key stakeholders (such as the management team, if a management buyout is the desired option, or any family member that may be identified as a potential successor); and to keep all documents and records safe and in a well-organised manner. This way, any issues with the business can be readily identified and addressed at the earliest opportunity.”
