23 Jul 2021

Third of businesses revisit succession plans amid Covid-19 disruption

11:47 am on 23 July 2021

More than a third of business owners have reconsidered their succession strategy as a result of the pandemic.

A June survey of business owners by consultancy Platform 1 has found 60 percent of the business owners surveyed did not have a succession plan in place, which was an increase on the year earlier survey of 48 percent.

"Covid 19 is still a disruption to business owners in 2021," Platform 1 director, Mike Warmington said.

About quarter of business owners think it would be more difficult to find a buyer within the next year.

"This is however more positive than in 2020 after the first lockdown," Warmington said.

The most common preferred solution was an outright sale, which was preferred by 30 percent of respondents, followed by succession to a family member or existing staff member, or a merger.

"While owners may state their preferred succession option, many have no plan or a very loose plan and haven't considered all the options available to them," he said.

"The earlier they start thinking about it the more options that are available."

About 41 percent were open to bringing on board a capable person with capital as a business partner, although that was down on last year's 48 percent

"A talented external person with capital coming into a business, growing it, and gradually buying the owner out is increasingly seen as an option," Warmington said.