SPOTLIGHT ON: Business succession planning
Steps to smooth business transitions
One of the biggest responsibilities of running a business is thinking about what happens when you’re no longer at the helm.
Succession planning isn’t just for “later” or for very large companies. Whether you plan to sell, hand the business to family, move to employee ownership, or simply step back one day, having a plan in place protects what you’ve built and gives you options.
In my experience, the businesses that struggle most with succession are not the ones with the worst numbers — they’re the ones that left planning too late.
This post cuts through the jargon and sets out what succession planning really involves, why it matters, and how to approach it sensibly.
What business succession planning actually means
Succession planning is about preparing your business to continue without you, whether that’s through retirement, illness, sale, or an unexpected change.
It’s not just choosing who takes over.
A proper plan looks at:
- ownership and control
- leadership and management
- financial structure
- tax implications
- timing and transition
Done properly, it gives clarity and stability at a point where uncertainty can otherwise creep in.
Why succession planning matters
A surprising number of owners still don’t have a plan. According to the Federation of Small Businesses, around 40% of UK business owners have no succession plan at all.
That matters because failing to plan can lead to:
- loss of business value
- unnecessary tax bills
- disruption for staff and clients
- family or shareholder disputes
- businesses simply closing when an owner steps away
A clear plan helps protect value, minimise tax exposure, and ensure continuity — even if plans change later.
It also gives you peace of mind. Life doesn’t always wait for the “right moment”.
Common succession routes (and what to watch for)
There’s no single “best” option — it depends on your goals, your business, and your people.
Passing the business to family
This can preserve a legacy, but it only works if the next generation genuinely wants — and is ready — to take over. Skills, motivation and timing matter more than bloodline.
Selling to a third party
Often the route that maximises value, but it requires preparation. Clean accounts, consistent profitability and clear growth potential make a big difference to buyer interest and price.
Management buyout (MBO)
Selling to existing managers can provide continuity and stability. The challenge is usually funding, so early planning is key.
Employee Ownership Trusts (EOTs)
EOTs are increasingly popular. They can preserve company culture and offer tax advantages, including potential capital gains tax relief — but they require careful structuring and long-term planning.
The key steps to getting succession right
1. Be clear on your end goal
Do you want to exit fully, step back gradually, or remain involved? Your objective shapes everything else.
2. Understand what your business is worth
A realistic valuation matters — especially if selling. Don’t overlook intangible value such as brand strength, client relationships and IP.
3. Identify and prepare successors
Whether internal or external, successors need time. Training, mentoring and gradual responsibility shifts make transitions smoother.
4. Plan the handover
A transition plan should cover leadership transfer, operational responsibilities and financial arrangements — not just a change of ownership on paper.
5. Address tax and legal issues early
This is where timing really matters. For example, Business Asset Disposal Relief is changing — the CGT rate is set to rise from 10% to 14% in April 2025 and 18% in April 2026. Leaving planning too late can be expensive.
6. Communicate clearly
Staff, family members and advisers should understand what’s happening and when. Silence often causes more disruption than the change itself.
7. Review regularly
Succession plans aren’t static. They should evolve as your business, personal goals and tax rules change.
Why starting early pays off
Early planning gives you options.
It allows time to:
- prepare successors properly
- attract stronger buyers
- spread ownership or tax exposure
- avoid rushed decisions under pressure
Leaving it late often means fewer choices and higher costs.
The real cost of delaying
Without a plan, businesses are vulnerable. Owners step away unexpectedly, value drops, disputes arise, and staff and clients are left uncertain.
I’ve seen good businesses struggle not because they weren’t profitable, but because no one had thought about what came next.
How I can help
Succession planning doesn’t have to be overwhelming. It just needs structure and honest conversations.
I help business owners think through:
- timing and exit options
- financial readiness
- tax implications
- practical next steps
Whether you’re years away from an exit or just starting to think about it, an early discussion can make a significant difference.
