- What time frames are you looking at?
- What is the value today?
- How much is enough?
Making the decision to move on from your business is not an easy one. There will be hard decisions to make which are likely to take an emotional toll. But being prepared can help once you decide that the time is right.
Working without a succession plan can invite disruption, uncertainty, and conflict, and endangers future competitiveness. For companies that are family-owned or controlled, the issue of succession may also introduce emotional or personal issues and may widen the circle of stakeholders to include non-employee family members.
Get the right team around you
Internally, a leadership team plays an essential role in any exit success. Few business owners will reach their personal and professional exit goals if the team is below par.
Attracting, compensating, and keeping top talent can be difficult at smaller, privately-held companies. Business owners need to know in advance of their exit how to evaluate and prove that they have a strong leadership team. It is not enough to only build a strong leadership team, business owners must also prove it to potential buyers.
Investing post sale
When the time comes to sell, it’s important to not only prepare your business but also make sure that the wealth you receive from the sale is protected and managed correctly to help you achieve your personal financial goals.
Regardless of the amount you receive from the sale of your business, it’s vital to identify the direction you wish to take your funds and how it will benefit you, your family and your estate.
Grow Your Profits
A cash flow model will show if the income from the sale will be enough to support you and your family and achieve your post-sale goals. You may also wish to maximise your wealth to pass on to your children.
There are a number of options for investing surplus funds depending on your objectives, risk tolerance and time scales. A financial adviser will be able to advise you on the available options for your situation.
The value of shares in a private trading company that qualify for business property relief (BPR) is protected from the charge to IHT on death. Once the shares have been sold, this protection is lost and the cash is fully exposed to IHT at 40%.
It is important to consider how best to approach your finances to mitigate unnecessary inheritance tax exposure. For instance, you may consider a Family Investment Company (FIC) as a way to pass down wealth to future generations through a tax-efficient vehicle.
To discuss estate planning options please speak to your adviser or contact us.