Wealth Planning -

Succession Planning and Wealth Management for Business Owners

Many businesses do not have a succession plan in place and starting the process can be daunting. Find out how to take the first step with Arbuthnot Latham.


23rd August 2023


As a business owner you think about the future of your company all the time, but are you thinking in quarters or decades? Whether through retirement or an unexpected change in your circumstances, have you considered what passing your business to a successor might look like?

If answering these questions sounds overwhelming, you are not alone. According to research by Armstrong Craven, nearly three-quarters of CEOs and 71% of boards are not actively considering succession planning strategies, while 95% of HR professionals say their company succession plans are inefficient.

These decisions can be even more delicate in small family businesses. In 2022, PwC research revealed only 30% of family businesses have a formal succession plan in place, with many reporting a resistance to change and sensitivity around the issue as the main blockers.


Succession planning is one of many challenges business owners face today, and its importance should not be overlooked.

  • What is succession planning? There are several different types of succession planning. One might include the process of deciding what happens to your business when you retire or die. Another could focus on leadership within your company and prepare for when those in critical roles retire or move on.
  • Why it matters: Having a succession plan in place future-proofs your business and livelihood; it also ensures business continuity, enabling you to react to change with minimal disruption.
  • How often you should review your plans: Think of succession planning as a contingency plan that should be revaluated and updated as your company grows or changes. These plans should be reviewed annually.



Developing a business succession plan: where to start

1. Identify your succession plan

What will happen to the business if you retire, die, or choose to sell your business or part of it?


Things to think about before:


When retiring and handing your business over you want to transition as seamlessly as possible and with as little stress as possible. Are you handing  the reins to the next generation? How will you know when you/they are ready? How can you get them more involved in the business as you prepare to leave? What skills gaps do you need to consider?


When thinking about who should inherit your business, there are plenty of options. Should it go to a select group of employees, your partner or family? Who has shares and voting rights, and is there any shareholder protection in place?

It is also worth considering whether the business has the flexibility and safety net needed to survive should you die. In this instance, key person insurance can provide a financial cushion.

Selling the business or part of it

Are you selling your business to a third party, another shareholder or business partner, or even to employees? Does the business need to reach a certain valuation to prepare for sale?

Have you considered the growth needed for a confident sale? Each of these options requires a specific strategy to ensure all your bases are covered.

2. Review your talent pipeline

Succession can focus on leadership and non-leadership roles within the company. Identifying the positions that are most in need of successors is a good place to start. The areas with no identifiable successor are the most critical and will have the biggest impact on your company in the long run. During this process, it is important to consider how much of your workforce is eligible for retirement, what your talent pipeline looks like, which areas of the business have high employee turnover, and which positions take longest to fill.


3. Understand your options

Succession planning is not a one-size-fits-all approach, and it is worth exploring the various options available to you for each scenario. Handing the reins to the next generation looks different in each business and creating an action plan to prepare yourself and your successors is crucial.

It is never too early to plan for succession

For small to medium-sized family business owners, passing down a business can be more tax efficient than passing on wealth, but making this long-term vision a reality can lead to more questions: Should I bring in a non-family member? Should I bring in external investors? How do I want my family to benefit from my business once I am gone?

At Arbuthnot Latham we work closely with entrepreneurs and business owners at all stages of the business lifecycle. If you need help discovering the impact of these decisions, our wealth planning experts can help you by assessing the type of business you operate, the agreements you have in place, and the structure of your plan.




Further reading about Wealth Planning



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Retirement Planning

Retirement means different things to different people. Whether you’re looking to continue to work in one capacity or another, embark on a new project or hang up the metaphorical suit for good, financial freedom allows you to choose the path you want to pursue.

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