Frequently little or no consideration is given to the succession plans for a business.

Business succession planning involves transferring the ownership and control of a business, most likely through retirement, to new management. It’s a key part in protecting the stability and continuity of the business.

Business owners must also think about what they’d want to happen if they were to suddenly die or become critically ill. Who would they want to get control of their business and how and where would the money come from to make sure this happened?

Succession works in four main ways:

• Handing over the ownership to a family member
• Handing over the ownership to the remaining business owners
• Appointing an external successor
• Disposing of the business through a sale, management buy-out, management buy-in or voluntary liquidation

While there are no hard and fast rules on succession planning, it’s important that business owners link it to the needs and interests of the co-owners and dependents. Planning should start as early as possible to avoid conflict and confusion at the time of handover. This will also increase the chances of future business success.

‘We look at business succession in more detail regarding different business types within this toolkit.