A Feasibility Study can help you to understand the possible outcomes of different succession planning scenarios to determine the most preferred route for you and your business.
Succession planning is an essential exercise for owner-managers and shareholders. When you’re ready to begin the process, it can be pretty overwhelming to pick an exit route and know for sure that it’s the best option for the shareholders and, indeed, the business going forward. This is where a Feasibility Study may provide some clarity and comfort in your decision.
What is a Feasibility Study?
A Feasibility Study exercise can help establish and communicate the outcomes of identified potential exit routes whilst also considering the shareholders’ preferences (if applicable).
Tailored specifically for you, the exercise outlines the pros and cons of each exit option. We can help you narrow these down, if you’re considering several. It also outlines the time it may take to complete, the costs associated and the impact on the business and team.
The exercise can also consider whether any shareholders are hoping to exit the business fully or remain, what would happen with any remaining shares, and how new shares could be distributed. Of course, this can be difficult to navigate and keep the process progressing without the assistance of an independent third party.
The Process of a Feasibility Study
The general steps undertaken in the feasibility study process will include the following, but this will be considered and altered depending on each unique situation and whether other measures need to be introduced.
- Initial Consultation: An initial discussion is held with the shareholders to understand the current position of the business and any exit options which have initially been identified.
- Data Collection: Information is requested regarding shareholding percentages and financial accounts.
- Understanding Personal Objectives: One-to-one interviews are conducted with the shareholders to understand their own personal objectives and where they are on their own journey with the business. In some scenarios, some shareholders may wish to exit, and others to remain.
- Information Analysis and Preparing the Report: After receiving the requested information and conducting all shareholder interviews, the first draft of the Feasibility Study is prepared.
- Presenting the Report to the Shareholders: The first draft of the Feasibility Study report is presented to the shareholders with the aim of agreeing upon a plan to proceed.
- Discussions with the Management Team: Depending on the shareholders’ desires to exit or stay with the business, or if any members of the management team will be gifted or acquiring shares, one-to-one interviews will be held with the management team as applicable.
- Redraft and Update the Report: Findings from the Management Team interviews are considered (if applicable), and the Feasibility Study report is altered accordingly.
- Review and Discussion: The final report is then presented to the Shareholders and Management Team so that all parties can review the options and agree on a preferred route.
How fds Can Help
At fds, we have successfully completed over 400 transactions and helped business owners and shareholders exit their businesses with confidence. We pride ourselves on delivering personalised, expert support that considers the unique requirements and aspirations of all shareholders involved.
Wondering how a feasibility study may better prepare your decision-making or assist with succession planning? Learn more about how we can support you by contacting us to discuss a tailored feasibility study confidentially.
