The Business Behind the Van: December Questions About Succession

The QuestionThe December question is not what it is worth, it is who runs it

There is a fortnight at the end of December when the vans are off the road and the business is briefly still. Owners who have spent thirty years pricing jobs and answering phones find themselves with nothing urgent in front of them, and the question that arrives is rarely about money. It is some version of how much longer, and who would do this if I stopped.

That question is worth taking seriously rather than shaking off in January, because the honest answer determines almost everything about what happens next. A business that works when the owner is away for a fortnight is a business with options. One where quoting stops, technical decisions queue up and two clients wait for a call is a business with one option and a discount attached to it.

The test is not hypothetical and you have just run it. What actually happened over the shutdown. Who signed off the emergency call-out, who priced the job that came in on the 29th, who the client rang when something went wrong, and whether anybody needed you. The answer you already have is more reliable than any assessment somebody else could do.

A business that works when the owner is away for a fortnight is a business with options.

The RegistrationThe succession problem hiding in your scheme registration

Competent person scheme registration rests on a named individual holding the technical competence, the qualified supervisor. In a large number of electrical businesses that individual is the owner, which means the registration, the ability to self-certify notifiable work and a share of the client base all depend on one person continuing to be there. That is a succession problem wearing an administrative disguise.

It is also among the most fixable things on the list, provided it is started early. Identifying the person who will hold the role, getting them through the qualifications and the experience the scheme expects, and having them carry it through at least one annual assessment is a project measured in a year or two rather than in weeks. Doing it removes a genuine risk from the business and a genuine discount from the price.

The same reasoning applies beyond the registration. Design responsibility, pricing judgement, the relationship with the two clients who only deal with you, and whatever is not written down about how the business runs are each a version of the same dependency. None of it is a judgement on how well you do the work. The question is what remains when you are no longer the one doing it.

The OptionsThree routes, and how long each of them takes

A sale to a trade buyer or a backed group is the fastest of the three and still takes six to nine months once it starts, on top of whatever preparation is needed first. It usually produces the highest proportion of the value in cash at completion, and it hands the business to somebody who will run it their own way, which some owners find easier than others.

A management buyout keeps the business in the hands of people your clients already know, and it is slower and more constrained. The price is usually funded from a mixture of the buyers' own money, bank debt and deferred consideration paid out of future profits, so you are financing part of your own exit and staying interested in the result for several years. It works well where the management team is genuinely capable and badly where it is merely loyal.

Family succession is the longest of the three by a distance, and the one most often assumed rather than planned. If a son or daughter is going to take it on, the qualifications, the client relationships and the commercial authority all have to be built in advance, and the honest conversation about whether they actually want it is better held five years out than two. The fourth route, doing nothing for now, is entirely legitimate. It is only a problem when it is a default rather than a decision.