That’s why I was pleased to chair a webinar last week on succession planning and equity finance. Organised by the Development Bank of Wales, it brought together a panel of entrepreneurs, advisors and investors to explore how we can better support Welsh businesses through ownership transitions.
Let’s start with the reality: 43% of SMEs have no succession plan in place. Nearly a third have been under the same ownership for over two decades. And yet, succession is often treated as a last-minute fix rather than a strategic opportunity.
As chartered accountants, ICAEW members are well placed to guide business owners through this journey. Chartered Accountants understand the numbers, yes—but more importantly, we understand the people behind them and have long-standing relationships that allow us to ask the difficult questions: “What’s your plan for the future?” “Have you thought about who might take over?” “Do you know what your business is worth—and how you might realise that value?”
One of the most compelling succession routes we discussed was the Management Buy-Out (MBO) or Management Buy-In (MBI). These options offer continuity, preserve local jobs, and often result in smoother transitions than trade sales. But they require planning. As Jason Thomas of Swansea-based Afon Engineering talked about in the session, identifying the right team, preparing the business for due diligence, and engaging advisors early were all critical to his successful MBO.
That’s where ICAEW members come in. They help businesses “get their house in order”—from governance and financial reporting to legal agreements and valuation, help bridge the gap between founders and future owners, and help structure deals that are sustainable, not just financially, but operationally and culturally.
Of course, succession planning is only half the story. Funding the transition is the other. And here, equity finance deserves far more attention than it gets.
Equity isn’t just about giving up a slice of your business—it’s about gaining a partner. As Bethan Cousins from the Development Bank explained, equity investment can reduce the financial burden on a business, provide breathing space during transition, and unlock growth potential. It’s flexible, patient, and aligned with long-term success.
For MBOs and MBIs, equity is often the difference between a deal that works and one that doesn’t. Debt alone may not be sufficient—especially in today’s climate of rising interest rates and economic uncertainty. Equity provides headroom. It allows new management teams to invest in the future, not just repay the past.
The Development Bank of Wales plays an active role in this space. Beyond providing capital, they work closely with vendors, management teams and advisors to help shape fair and workable deals. Their understanding of succession dynamics and early-stage challenges can be a valuable resource. They also collaborate with a broad network of intermediaries—including accountants, lawyers and corporate finance professionals—to help facilitate these transitions.
Tanya Wilson from SME Finance Partners reminded us that succession deals can be emotionally draining and are certainly time-consuming. Management teams still have a business to run. That’s why the early appointment of right advisors is so important. We collate the necessary data, take the strain, guide negotiations, and bring experience from previous transactions.
Richard Jones of Blake Morgan echoed this, urging vendors to engage with lawyers early and prepare for due diligence well before they’re ready to exit. It’s then about managing the dynamics of the different parties involved and smoothing the transition by being proactive, not reactive. And it’s about having a Plan A, B and C.
Post-investment, the relationship with equity partners continues to evolve. As Managing Director of Afon Engineering, Jason spoke about how the Development Bank supported his business with additional funding lines and strategic input. Equity isn’t just capital—it’s collaboration.
For those considering succession, the Development Bank of Wales has recently launched the £40 million Wales Business Succession Fund. It’s one of several initiatives aimed at supporting ownership transitions across the country, whether you’re planning an exit or stepping into a leadership role.
So, what’s the takeaway? Succession planning isn’t a luxury—it’s a necessity. Equity finance isn’t a threat—it’s an opportunity. And ICAEW members aren’t just accountants—they are catalysts for change.
If you’re a business owner, start the conversation now. If you’re an advisor, raise the topic with your clients. Because planning for tomorrow starts today. And together, we can ensure that Welsh businesses not only survive—but thrive.