Exit and Succession Planning

Our experience has shown that a proactive exit is far more rewarding for business owners than a reactive sale. Planning an exit ensures the objectives of the business owners are met and increases the value of the business maximising the final proceeds to the owners.

The preparation of an exit plan makes you as the owners of the business discuss and consider some of the key issues and objectives in respect of:

• Yourself - your future income needs, how long you want to remain active in your business, who has the management skills to run your business in the future, etc;
• Your family - their future income, their involvement in the business, fairness and equity between them;
• Your business - how will your actions/plans affect your business; will the key employees feel insecure, will the business lose value with your departure?

Having identified your main objectives these form the cornerstone of the exit plan. Consideration can then be given to the various exit options and a decision made on the most appropriate way forward.

There are a number of exit options that can be discussed including:

• Sale to trade buyer
• Sale to family members
• Management buy out/buy in
• Flotation on the Stock Market (IPO)
• Voluntary Liquidation - controlled closure of the business

Our approach to working with clients on developing an exit plan is as follows:

• Obtain a clear understanding of the aspirations of the shareholders.  This forms the cornerstone of our planning platform and provides a base upon which to build
• Understand the shareholders' income/capital needs in retirement, taking into account existing pension   provision and investments.
• Evaluate the business - current situation and future plans

- Review current structure and performance of the business - identify any changes needed to the business i.e. grooming it for sale
- Develop a plan to implement any changes needed including costings and timescale
- Identify the future value of the business
- Identify timescale to achieve future value
- Review this value in light of the income requirements of the shareholders

• Appraise the taxation position of the individuals and company
• Identify and explore the various exit options available to meet shareholder objectives
• Review options with shareholders and agree a most appropriate exit route
• Develop detailed plan and timescale