The sooner this future risk is addressed the better. You may be required to remain in the business post disposition and almost certainly will be during implementation of a succession plan.
Where you have children, they may not be interested in following you into the family business, much as you might like or have expected them to.
Sale is often the preferable option but it is not always available. Business competitors and new entrants to the market often have other options including buying similar businesses owned by others in a similar position to you. They may not be prepared to pay what you feel your business is worth or simply may not be interested or not exist.
Do you need to restructure or reposition your business to make it a more attractive purchase option? What can you do to your business to make it a more valuable and attractive addition to someone else’s business? Does it need to provide more services or become more specialist? Does having your personal name in the business make it more or less saleable? Is there a risk, or perceived risk, that the business customer/client base and, with it, the business goodwill, is too attached to you personally?
An alternative to sale which is often a better option can be succession planning. Succession planning involves identifying key personnel or introducing outsiders who can be brought in as immediate or future equity participants in your business. There are a range of mechanisms available for ensuring a smooth transition both operationally and financially including minority employment linked shareholding agreements and deferred purchase agreements.
If you would like to sit down and discuss your succession exit strategy options with one of our specialist commercial law partners, contact us today.
