Maximise the return when you exit your business
Succession planning is the key

If you are planning to exit your business, then having a succession plan in place is crucial. It's never too early to work out your strategy for exiting your business. Sellers who haven't prepared may even find themselves getting less for their businesses than those who do plan. These are some of the key points you need to consider.

Strategy

Consider your strategy. Can you add value to your business when you plan to sell? Should you be aiming to maximise shorter- or longer-term profits? Are you over-reliant on just a few customers?

Timing

When will your business be worth the most, given changes in your supply chain, competitor activity or technological advances?

Tax

Tax-efficient strategies for realising your investment in the business can take time to set up. Your company might need to make sizeable contributions to your pension fund for several years. You need to keep in touch with your professional advisors to make sure tax changes are factored into your plans.

Legals

If you have legal disputes, sort them out. If a shareholders' agreement or your company's articles of association say you must offer your shares to other shareholders before you can sell to an outsider, square things with them. Agree who will take over personal guarantees. If the company leases premises from you, discuss the alternatives. Ensure all key agreements are in place.

Employees, customers and suppliers

Key workers must be retained for a good sale price. Clauses in customer or supplier contracts may give them termination rights if ownership changes. When will you talk to them to make sure they'll do business under the new owner?

The offer

Take advice on the different tax implications of selling company shares, compared to the sale of company assets. Selling shares is generally a better option for the seller than selling assets.

Systems

Make sure management information systems, equipment and premises are in good order.

Finances

If you want to keep a stake in the business, you can restructure the company's finances. Increasing bank borrowings and selling some of your shares back to the company is an option.

If you require any further information about the services that we provide or would like to review your financial planning position, please email or contact us.

Levels and bases of, and reliefs from, taxation are subject to change.