What comes next? 5 top tips for business and personal financial success

When you’ve spent years building up your business, it can be hard to picture a time when you may no longer want to run it. So what do you need to do to ensure your business is in the best possible position for future success?

Here are our five tips for making a success of succession planning:

Define your goal

What would you like to achieve from your business? You may receive an offer from a third party, want to keep it within the family, or receive a large investment for future growth. 

It may be that you want to create a solid business for your family to inherit. If so, you need to be clear about which family members you anticipate will be involved, check they are on board, and let them understand the business and how it works early on. 

Or if you have a timeline or a financial figure in mind that will allow you to retire in comfort, you need to start planning for it. It could be, for example, that you need to grow your business by 5% each year for the next five years to generate enough income for your retirement. 

Don’t waste your money

A well-known phrase is “a person doesn’t know how much he has to be thankful for until he has to pay taxes on it”. Ensure you keep an eye on your and your business’ tax affairs to ensure everything is in order to mitigate risks. Getting the right tax advice can save you and your business money down the line.

Get your numbers right

Whether you’re planning to sell your business, receive an investment or transfer ownership, it's important you know your numbers. If someone is interested in your business, fundamentally, they will want to know about the financials (both historical and future forecasts). Ensure you have a detailed business plan, financial model and realistic valuation figure in place – be honest with yourself.

Get your paperwork in order

Potential buyers and investors will look at your entire business, not just the financials, so anticipate questions covering all aspects of your company. They will expect detailed answers. Good legal housekeeping from the outset saves time and money and gives any buyer or investor confidence in the business.

Attempting to sort out issues with paperwork (or a lack of documents) at the time of any exit can slow down the process, decrease confidence and, in some cases, stop the transaction from taking place. A well-organised business is much more attractive to investors.

Surround yourself with a strong team

Your departure from your business will inevitably leave a big gap. Developing your employees and ensuring you have a strong team (and this need not be big) of knowledgeable, experienced and trustworthy people and professional advisers is key. Not only does it ensure a smooth transition for your employees, but it shows that your business is well-managed and possesses the skills to go to the next level (with or without you).

Getting a business ready for the next step doesn’t happen overnight. Having a legal team behind you who can help you with your business is key. Our specialist corporate services team are experienced in supporting businesses with creating and implementing their long-term strategies. If you’re a business looking to scale up or considering your exit options, call Sara Worsick on 0191 211 7945 or email [email protected]