Most family business owners know they should have a succession plan. Far fewer actually do.
At VA Business Services, we see this time and again. After years of hard work building a business, stepping away can feel premature—or simply something to think about “later.” But in reality, the businesses that transition most successfully are almost always the ones that plan ahead.
Why succession planning matters now (not later)
Without a clear plan in place, decisions often end up being reactive rather than strategic. That can lead to:
- Accepting a lower sale value due to poor timing
- Rushed handovers
- Family disagreements at critical moments
Succession planning isn’t just about exiting—it’s about strengthening your business today. If key knowledge, relationships, or decision-making sit with one person, that creates risk now, not just in the future.
Planning ahead puts you in control—of timing, outcomes, and how the transition is managed.
The key questions to consider
Every family business is different, but the same core questions apply:
What do you want personally?
Are you looking for a clean break, or a gradual step-back? Is keeping the business in the family important, or is maximising value the priority?
What is your business really worth?
Value depends on the buyer, timing, and structure. In some cases, investing time (12–18 months) to strengthen the business can significantly increase its value.
Could the business run without you?
If everything depends on you, it’s harder to transfer and less valuable. Building a capable management team is one of the most important steps in any succession plan.
What are the family dynamics?
Expectations, fairness, and capability can all create tension. Open conversations early on can prevent major issues later.
Your main succession options
There are four common routes for family business succession:
- Selling the business
This could be to a competitor, investor, or external buyer. It’s often the best way to unlock value and achieve a clean break.
Another option is an Employee Ownership Trust (EOT), which has become increasingly popular in the UK. While recent changes mean Capital Gains Tax relief is now reduced (to 50%), EOTs can still be an excellent option for preserving company culture and rewarding employees.
- Management Buyout (MBO)
Selling to your existing management team offers continuity and can allow for a phased exit. Funding is often structured through a mix of loans, deferred payments, and sometimes external investment.
- Passing the business to family
This is often the preferred option—but also the most complex. Successful transitions rely on:
- Planning early
- Focusing on capability, not entitlement
- Open communication with all family members
It’s also important to consider fairness—particularly where not all family members are involved in the business.
- Winding down the business
If no suitable successor or buyer is available, closing the business responsibly may be the best route. This needs to be managed carefully to meet legal, financial, and tax obligations.
Don’t overlook tax implications
Tax should support your decision—not drive it—but it remains a key factor.
Recent changes mean:
- Business Property Relief (BPR) will be capped from April 2026
- Full relief applies up to £2.5 million per individual
- Above that, only 50% relief applies (effectively 20% inheritance tax on the excess)
For some businesses, this significantly changes succession planning strategies—making early advice and careful structuring more important than ever.
When should you start planning?
Earlier than you think—typically 3 to 5 years in advance.
This gives you time to:
- Strengthen your business
- Develop your team
- Improve financial performance
- Plan your exit on your terms, not under pressure
Even if you’re not ready to step away, having a plan gives you flexibility and peace of mind.
How VA Business Services can support you
At VA Business Services, we understand that succession planning is about more than numbers—it’s about people, relationships, and legacy.
We offer succession planning facilitation to help you:
- Explore your options clearly and objectively
- Facilitate open and productive family discussions
- Identify risks and opportunities within your business
- Prepare your business for transition or sale
- Work alongside your accountants, tax advisers, and legal team
Our role is to guide the process, keep conversations on track, and help you make informed, confident decisions.
Start the conversation
If you’re beginning to think about the future of your business, the best first step is simply a conversation.
No pressure, no obligation—just practical guidance to help you understand your options and plan the right path forward.
Get in touch with VA Business Services today to start planning for tomorrow.
Book Your Free Initial Consultation
Contact VA Business Services today
📞 Speak to our team today 01642 686414
📧 Email us for advice office@vickyanderson.co.uk
📅 Book a Free 45minute consultation