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Why Succession and Exit Planning Should Be on Every Business Owner’s New Year Agenda

Succession Planning

Why Succession and Exit Planning Should Be on Every Business Owner’s New Year Agenda

By , January 30, 2025
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As the first quarter of the year gets underway, business owners are actively working toward their goals for growth, efficiency, and profitability. While these are essential, one critical aspect that often gets overlooked is planning for the long-term future of the business itself. Whether it’s succession planning, exit planning, or employee ownership solutions, taking a proactive approach ensures stability, protects business value, and secures a lasting legacy.

The Challenge of Business Continuity

Many business owners pour years – even decades – of effort into building their company but postpone planning for what happens when they step away. This lack of preparation can lead to leadership gaps, valuation declines, and, in some cases, business failure. Without a well-defined transition strategy, owners risk seeing their hard work unravel.

The reality is that every business will eventually undergo a transition. The question is whether it happens on the owner’s terms or as a reactive response to unforeseen circumstances. The most successful transitions are not last-minute decisions; they are carefully crafted strategies executed over time.

Key Considerations for Business Transition Planning

Maximising Business Value

Business valuation is not just about preparing for a sale. Understanding and improving business value ensures that an owner’s hard work translates into tangible financial success. This includes identifying operational efficiencies, strengthening leadership teams, and ensuring financial transparency.

Leadership and Management Transition

Who will lead the business in the future? Whether it’s internal succession, a management buyout, or an external sale, a smooth transition requires preparing the next generation of leadership well in advance.

Employee Ownership as a Strategic Solution

Many business owners are now considering Employee Share Schemes (ESS) or Employee Ownership Trusts (EOTs) as an alternative to traditional succession methods. These structures allow businesses to transition ownership to employees, fostering engagement and ensuring long-term sustainability.

Risk Mitigation

An effective transition plan considers potential risks such as economic downturns, industry disruptions, or personal circumstances that could affect the owner’s ability to lead. Identifying these risks early allows for contingency planning that safeguards the business.

Why Now is the Time to Plan

The start of a new year is a natural time for reflection and forward-thinking. While growth strategies and operational improvements often take priority, business owners should also focus on building a robust succession and exit plan. By doing so, they create not only short-term stability but also long-term security for themselves, their employees, and their stakeholders.

The most successful business transitions don’t happen by chance – they are the result of careful planning, strategic decision-making, and a commitment to the future. As 2025 unfolds, now is the time to take control of what lies ahead.

Please get in touch if you need assistance with putting a plan in place.

Craig West

Dr Craig West

Founder & Chairman | Succession Plus

Dr Craig West is a strategic accountant who has over 20 years of experience advising business owners.

With a background as an accountant in practice and two master’s degrees, Craig formed a strong view that the majority of business owners (and often their advisers) were unprepared and unaware of the steps required to prepare for exit. He then designed and documented a unique 21-Step Business Succession and Exit Planning process to assist owners and their advisers in navigating this process.

Craig now acts as a strategic business and financial mentor for mid-market business owners. Craig has written four critically acclaimed books educating business owners on employee incentives, succession planning, asset protection, and exit strategies. Additionally, he has completed doctoral research on Employee Share Ownership Plans (ESOPs) for succession.

Craig is a Member of the Forbes Business Council where he leverages his extensive experience to contribute valuable insights on helping business leaders navigate the complexities of growing and exiting their businesses.

In April 2024, the Exit Planning Institute admitted Craig to the International Exit Planning Circle of Excellence.

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