Have you thought about business continuity?

Planning for Exit: Colin Low, Kingsfleet

When starting a business, a founder’s full focus is on simply establishing a strong foundation that will support their vision. Once this has been achieved – finances sorted, processes in place – all energy is then put into exponential growth, thereby building a successful company that will continue to develop over the years. This is all as it should be, but along the way it is also important to protect your achievement and think about business continuity.

Can your company carry on without you?

Make yourself dispensable

If you have worked hard to create a business from the ground up, there’s a good chance that you have, at some point, covered all the day-to-day roles involved – from photocopying to sales. I know I have! But as your company grows, it will become necessary to hand over the responsibility for all key tasks so you can take a step back; you need to get to a place where if/when you are taken out of the picture – whether planned or unexpected – the business will continue to thrive without you.

A planned exit

If you are thinking of selling your business or retiring, there are a few things to consider:

• Have you created a staff structure that can confidently run everything without you?
• If retiring, have you put a pension in place? Putting funds into a pension – both as an employee and as a business – is a tax efficient way to save for retirement.
• If selling, how much is the business really worth? Be clear about what money you will need once the business is not providing an income – then plan the right time to make your move.
• Think about who you want as a buyer. Will they take care of your clients? Are they in it for the long term? Will they continue to work with the same values?
• Once sold, have you formed a strategy for the resulting funds? You may want to look at investments, pension contributions, or savings accounts to maximise your return.
• Have you thought about how you are going to use your time once the initial holiday period is over? It is important to still have a purpose once the business is not there.

An unplanned exit

Of course, you also need a plan in place in case the unexpected happens and you find yourself removed from the company through illness, incapacitation, or death – you may think it’ll never happen, but it is always good to be prepared. Things to consider include: Medical MOTs, a Death in Service benefit, Key Person Insurance, and having a second director with full legal responsibility.

In summary, ensuring business continuity starts well before you are ready to hand over the reins; it takes time to plan an exit that will allow your company to have a successful future without you.

Kingsfleet is a trading name of Kingsfleet Wealth Ltd which is authorised and regulated by the Financial Conduct Authority. Company No. 07051136. FCA Registration No. 514731