A feasibility study is a great place to start for business owners who are unsure of the best path they can take in regards to their business exit. With several exit routes and succession planning options available, it’s not unusual for business owners to feel overwhelmed by the question of whether the route they are about to embark on is right for them, the business, and their employees.
A feasibility study report shares the types of modelling for business exits. This includes the pros and cons of the considered exit routes and how each option could provide different results. This allows the shareholders to make an informed and confident decision on how to proceed. The benefits of conducting a feasibility study are invaluable.
Poonam Kaur, CEO of fds, shares how a feasibility study may help business owners clarify their succession planning options.
A feasibility study can be really useful in understanding the options that are available to them. A feasibility study will enable business owners to evaluate the different options available. From that, they can make a much more informed decision about the next steps.
What does a feasibility study include?
It is really important to understand the client as best we can to understand their aspirations. It is crucial to consider what exactly they want to achieve in terms of the next steps. This could be about maximising value, keeping the culture of the business in the company, or rewarding staff. A feasibility study will enable the decision maker to better understand which option most appropriately aligns with the aspirations that need to be achieved as part of this plan.
Are the feasibility reports tailored to each organisation?
Every report is tailored to each individual business. We look at providing various options, such as whether a trade sale, an employee ownership trust (EOT), a management buyout (MBO), or various other avenues may be more appropriate. A feasibility study will provide you with the pros and cons of each exit option to outline what each option entails regarding the time and cost involved. While fds is not a tax specialist company, we would consider involving tax advice as part of the process, as this can be a key element.
Is the report presented to the board?
Once we have completed the preparation of the feasibility report, we will then comb through the report page by page. This is presented to the shareholders so they are able to ask any questions that they may have. From the report, this could lead to considering other scenarios and available options. Ultimately, we work with our clients to ensure we can get them the best possible outcome to achieve their aspirations.
What happens next?
Once all options have been explored and shareholders are in a position where they can make an informed decision about which route they want to undertake, fds can then help them through that next stage, including a trade sale, EOT, MBO or any other option. fds has completed over 400 transactions of all sizes and sectors; we are very well equipped to guide you through an often complicated and seemingly overwhelming process, to make this as simple as possible for you.
Learn more about our feasibility study service or get in touch to have a confidential discussion with the team.