Family businesses make a significant contribution to the UK economy and research from the Institute for Family Business (IFB) suggests that many are looking to expand after a successful 2015. Here are few things business owners should consider to ensure a smooth transition to the next generation:
Current business owners need to ensure they are accumulating sufficient wealth to enable them to step down and hand over the reins. A personal plan that works towards their desired lifestyle after retirement should be considered alongside a business plan.
Successors need help to prepare for the tasks and challenges that they are likely to face. The process goes beyond formal education and will include the skills required to comprehensively understand and manage each of the constituent parts of the business.
Tax planning addresses the issue of efficiency in order to avoid unnecessary payments, as well as capitalising on relevant tax reliefs, such as Entrepreneurs Relief and Business Property Relief.
We don’t often like to think about it, but it’s important to plan for every eventuality. Disaster management seeks to ensure that shares in a business pass seamlessly in the event of the current owner suffering premature death or a debilitating illness.
Currently, there are over 16,500 medium and large family businesses in the UK, employing over 11.9 million people. One in ten large UK businesses are now family-run. Growth and expansion was found to be a top priority for family firms, with 49 per cent stating that they intend to expand within the next 12 months.