Succession
Succession Planning for Small Business Owners
Succession planning means deciding who will run and own your business when you step back, and building a dated plan to get there. Start two to five years ahead if you can, reduce how much the business depends on you, and choose a handover route that protects your team, your customers and your own income.
Why it matters
Many owner-run businesses close when the founder retires, simply because no one planned the handover. A plan changes that. It keeps people employed, keeps the service running for customers, and lets you realise the value you spent years building.
The main succession routes
Family succession
Passing the business to a family member who genuinely wants it. Works best with a clear timetable and an honest conversation about roles.
Management or team buyout
The people who already know the business buy it, often paid for over time from future profits.
Employee ownership trust
The business is sold to a trust that holds it on behalf of all employees. There can be tax advantages for the seller, subject to the current rules.
Sale to an outside buyer or operator
A competitor, local business or operator takes it on, sometimes in stages so you can step back gradually.
Five steps to a workable plan
- Decide what you want for the business and for your own next chapter.
- Reduce dependence on you by documenting processes and developing your team.
- Get your numbers clear so a successor can see what they are taking on.
- Choose the route and structure, with proper legal and tax advice.
- Set dates and milestones, then review progress openly.
Not sure which route fits?
Take the 3-minute scorecard, or see how we work with owners on handovers.
Not ready to talk?
Take the 3-minute scorecard and get a straight answer on whether to grow, hand over, sell or wind down.
Take the 3-minute scorecardFrequently asked questions
What is a succession plan?
A succession plan is a written, dated plan for who will run and own the business when you step back, and how you get from here to there. It covers people, money, timing and what you want your own role to be.
How do I sell a small business with no buyer in the family?
Common routes include selling to a manager or the existing team, a sale to a competitor or local business, an employee ownership trust, or a phased handover to an outside operator or investor. Each suits a different mix of profit, timescale and how much you want the business to stay the same.
How long does succession planning take?
Plan for two to five years if you can. That gives time to reduce the business's reliance on you, train the next leaders and show steady results, which all make a handover smoother and usually more valuable.
Can I keep an income after I step back?
Often, yes. Deferred payments, earn-outs, retaining a share of the business or a profit share can all provide income after you leave day-to-day work. The right structure depends on the business and needs proper tax and legal advice.
What happens to my staff in a handover?
When a business or part of it transfers to a new owner, employees usually move across on their existing terms under TUPE. A well-planned handover is one of the best ways to protect their jobs.
When should I start planning?
Earlier than feels necessary. Starting while you still have energy and choices gives you far more options than starting when health or circumstances force the decision.