By Chris Budd

Over the last few years I have spoken to hundreds of business owners about their succession plan in general, and the Employee Ownership Trust (EOT) in particular.

Many of these owners remain on our newsletter list, which suggests they are still thinking about the issue.

We have actively worked with around 15 businesses. One announced their sale to an EOT in September. Others (due to the pandemic) have sought other exits. We also work with businesses who are already EOT owned and are facing their own challenges.

We do, however, still have 100+ companies who we believe to be actively considering the EOT as their exit route. We regularly point out that the transition to the company being ready for sale to an EOT might take a couple of years at least.

This begs one particular question: what is stopping all those business owners from taking the first steps towards their exit?

A Decision Too Big

I was talking recently with the managing director of one business, a financial planning firm. She was describing her approach to the many compliance changes that have been brought in over recent years by the FCA. She found it paralysing to be faced with such an overwhelming list of things to do.

The company recently engaged a compliance consultant, who is drip feeding things for her to do. Now that the huge process is broken down into smaller steps, she finds the job much more manageable.

When we have big decisions to make, especially ones that simply seem too big that we are unable to move forward, then sometimes it is best to break it down and just take a few small steps

The Fantasy of the Business Plan

There is just one absolute certainty about any business plan, and that is that it will prove to be wrong. There is not a chance that everything which might happen over the next five years can be predicted.

So why do we keep making business plans?

The answer is twofold. Firstly, it is the act of making the plan that matters. The thinking which forces us to undertake.

Secondly, because the plan is organic. It needs to be reviewed on a regular basis to keep it live and relevant.

The fact that the plan is going to change should not stop the plan from being made. The fact that the plan seems too complicated to handle should not prevent it from being made.

The 5 Year Rule

Over decades of working with business owners, I would estimate that on 90% or more of the times that I have asked the question “When are you planning on selling the business”, I have received the answer:

“I’ll probably sell the business in 5 years time.”

When I come back a year later and ask the same question, I get the following answer:

“I’ll probably sell the business in 5 years time.”

How To Make The Big Decision

The answer to the challenge of how to make a big decision is as follows:

Make a small decision, and see where you end up.

The Eternal Business Programme provides a pathway to follow for your business to transition to the possible sale to an EOT.

However, you do not need to have decided that the EOT is the ideal exit for you to start the programme. Indeed, the first course of the programme is specifically designed to help owners decide what will be the appropriate exit to best suit them and their business.

So, in order to move closer to making a big decision about the succession plan for your business, make the small decision to take some action – to join the programme – and see where you end up in a few months’ time.

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