People, People, People

The right people are central to the success of your business. At different stages of your journey, those people may change. We look at all things people-related in this latest issue of the Watering Hole.??

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Achieving Growth?

One of the exciting aspects of any business, especially for start-ups and SME’s, is the growth phase. As with all phases in the lifecycle of a business, having the right people in place is crucial for success. Those who set up the company, with their great concept of a product or service, can’t expect to be experts in all fields and this is where outside support can help take the business to the next level with strategic planning. Business owners need to be comfortable with this process and it’s therefore important that the internal and external people align to drive the most from this activity.??

David Humby explores more about the people you need at each stage of your business growth journey here.?

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Tackling Challenges?

Recruitment can be time-consuming and expensive for small businesses. AI tools can help, but only if you use them in the right way. Chloe Carey Msc Chartered FCIPD , our HR Specialist, looks at the pros and cons of AI tools for recruitment.?

If you are struggling to recruit, we offer a bespoke service to help you find the right people.?

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Preparing for Exit?

Most business owners will only ever sell a business once, and it’s another area where the right people are the key to success.? Specialist help from the right people can really make the difference to the price you achieve and how smooth the process is.? Two popular exit routes include transferring the business on to some of the people who already have a stake in the company by either setting up an Employee-owned Trust (EoT) or going down the route of a Management Buy Out (MBO).??

Employee-owned Trust (EoT)?

An Employee-owned Trust means employees own the business indirectly – with some or all of the shares being held on their behalf. The ownership and governance of the business are separated, but the direction of the business can be influenced in how the Trust is created and employees can be represented on the Trust going forward. An advantage of this exit route is that it is exempt from Capital Gains Tax if the majority of shares transfer over, and a tax-free bonus can be paid to employees each year, if appropriate. It also supports a continuation of the business’s values and ethics going forward. Disadvantages could include a slower payment compared to a straightforward trade sale, and possibly a lower value for the company than could be gained in the open market.???

Management Buy Out (MBO)?

We also can support you to explore the Management Buy Out model. Here, the management team set up their own company to buy the shares in the existing business – depending on the structure of the deal agreed, this may or may not, require them to investing their own capital to provide a structured exit for the founder. Proceeds of the sale for the exiting owner are subject to Capital Gains Tax.??

We have had the pleasure of guiding a number of businesses through a sale process using these methods. A recent example involved a company we steered through a successful management buy-out process. Prior to our involvement there has been an unsuccessful attempt to go down the same route. But with our help, and us supporting the structure and business planning process, the process was successful. Representing both the owners and the managers helped us ensure a smooth sale, with the owner staying on for a couple of years to help maintain the company’s legacy and ethics during transition.??

Whatever solution fits, its important the incoming management team are happy and there is a clear plan, so that the owner who is selling can maximise their return.??

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Good preparation and as long a timescale as possible will ensure you make the right sale at the right price for your business. Get in touch to find out more. ?

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