For many SME owners, their business is more than just a source of income — it’s the product of years, if not decades, of hard work and dedication. Yet despite this, succession planning is often overlooked until it becomes urgent.
At Beavis Morgan, we believe that successful business exits start with early, strategic planning. Whether you intend to pass your business to family, sell to management, or find an external buyer, a well-structured succession plan will protect the business’s value and your personal financial future.
Why Succession Planning Matters
Without a clear plan, a sudden illness, change of circumstances, or shift in market conditions can create instability for the business and for employees. Proper succession planning:
- Protects the continuity of operations
- Preserves the business’s financial value
- Reduces risks to employees, customers, and suppliers
- Provides clarity and control over your personal financial future
- Supports better tax planning and reduces exit-related liabilities
A rushed or reactive sale can often result in a lower valuation or lost opportunities.
Key Options for Succession
Every business is different, and the right succession path depends on your goals and the structure of your company:
- Family succession: Transferring ownership to children or relatives
- Management buyout (MBO): Selling to existing senior staff
- Trade sale: Selling the business to an external buyer
- Employee Ownership Trust (EOT): Selling to employees under favourable tax terms
- Gradual share buyback: Reducing your ownership over time through structured buyouts
At Beavis Morgan, we guide clients through the pros and cons of each option to ensure the right fit for their personal and business ambitions.
Tax Planning: A Critical Part of Succession
Effective tax planning can significantly impact the financial outcome of your succession:
- Capital Gains Tax (CGT): From April 2025, the CGT rate applicable to Business Asset Disposal Relief (BADR) is set to rise, making timing crucial for owners looking to sell.
- Inheritance Tax (IHT): Structuring ownership and assets now can reduce future IHT exposure for your heirs.
- Business Property Relief (BPR): Ensuring your business qualifies for BPR can protect significant value from IHT.
- Pensions and Personal Wealth: Aligning business succession with your broader financial plan can optimise retirement income and protect wealth.
Starting tax planning early creates more flexibility and saves costs in the long run.
Practical Steps to Start Your Succession Journey
Succession planning is complex — but breaking it down into stages makes it manageable:
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Define Your Personal Goals
- Do you want to retire completely or remain involved in some capacity?
- Are you looking for maximum financial return or to preserve a legacy?
- What financial security will you need post-exit?
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Evaluate Your Business Readiness
- Are financials and operational processes well-documented and robust?
- Can the business operate independently of your personal involvement?
- What is the current valuation of your business?
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Identify and Develop Successors
- If transferring to family or management, assess skills gaps early.
- Consider mentoring or external training programmes to build leadership capability.
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Structure the Transition
- Create a clear transition plan and timeline.
- Decide on share sale structures, payment terms, and any phased exits.
- Communicate the plan to key stakeholders when appropriate.
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Seek Specialist Advice
- Work with legal, financial, and tax advisers experienced in SME succession.
- Review shareholder agreements, partnership agreements, and insurance arrangements.
- Regularly update the plan as circumstances evolve.
At Beavis Morgan, we provide integrated support — from valuing the business to structuring tax-efficient exit strategies — to help owners achieve their goals smoothly.
Why Start Now?
The longer your lead time, the better your options:
- Maximising value through improved profitability and reduced key-person dependency
- Better preparation for external due diligence
- More time to implement effective tax strategies
- Greater emotional readiness for the transition
Succession planning isn’t just about the exit — it’s about building a stronger, more resilient business today.
Conclusion: Secure Your Future with a Succession Strategy
Planning your exit is not a sign of stepping back — it’s a proactive step to protect what you’ve built and ensure it thrives in the future.
Whether you are looking to exit in two years or ten, Beavis Morgan can support you at every stage.
Contact Neal Groves your usual Beavis Morgan partner, or email info@beavismorgan.com for a confidential discussion about how to begin preparing your succession plan and secure the best future for your business and your family.
