Future-proofing your business: the next 3 years

With 2025 drawing to a close, business owners can use the new year as an opportunity to strengthen your resilience and plan for the future.

When we advise business owners, Lodders’ corporate lawyers often start with three key questions:

• How secure and future-ready is your business?
• What are you planning to do with the company in the next three years or in the near future?
• Are you looking to eventually step away, retire, and hand over control to the next generation?

The answers to these questions can help create the foundation of a robust corporate strategy for the next three years. In this blog, Evgeni Pratashchyk, corporate solicitor in Lodders’ Business Services group, discusses each question and highlights what you can do now to set your business up for future success.

How secure and future-ready is your business?

What we essentially mean by this question is how resilient is your business against legal, financial, and operational risks. Here are steps to take in order to find out the answer:

Conduct a corporate structure review

Is your company structure still fit for purpose? Consider whether your shareholding arrangements, directors’ duties, and governance processes align with current regulations and your growth plans.

Carry out a compliance health check

With the Economic Crime and Corporate Transparency Act now in force, identity verification (IDV) for directors and PSCs is mandatory. Failure to comply can lead to penalties or even criminal liability. For more information about the changes to IDV requirement, read our FAQs blog here. As part of the health check, it’s also worth identifying if you have appropriate privacy and data policies in place.

Assess contracts and risk management

Are your key contracts watertight? Reviewing your supplier agreements, customer terms, and employment contracts and keeping them up to date is a simple but effective way to make sure your business stays protected when the market is unpredictable.

Put cybersecurity policies in place

Cyber threats increased by 50% in past year, according to the latest figures from the National Cyber Security Centre (NCSC). Hackers are also increasingly using AI in their operations, and while the NCSC has yet to face an attack initiated by AI, it has warned that AI will almost certainly pose cyber-resilience challenges through to 2027 and beyond. It’s therefore more important than ever to have robust cybersecurity policies and insurance in place to safeguard your business.

What are your company plans for the next three years?

Strategic planning is essential for sustainability and growth. Some points to consider include:

Expansion or exit?

Are you planning to scale, diversify, or prepare for sale? The golden rule is start early to avoid value erosion. Each path requires different legal and tax considerations – we would be happy to discuss these with you.

Funding and investment

If growth is your goal, Lodders can also help you explore financing options, whether its private equity, debt, or joint ventures. As an example, you can read our recent case study on how our team helped to secure investment for Oxford Online Pharmacy.

Governance and ESG

Investors and regulators increasingly demand strong governance and environmental, social, and governance (ESG) credentials. If you haven’t already, you should start embedding these into your strategy now.

Preparing for succession and retirement

If you’re thinking about stepping back in the next few years, your succession planning should start early:

Shareholder agreements and wills

Ensure your agreements reflect your intentions for ownership transfer. It could be worth thinking about using family trusts or holding companies for tax efficiency. You should also make sure your wills are updated periodically so that they remain appropriate for your changing circumstances.

Leadership transition

It’s important to identify your future leaders as soon as possible, and start training them sooner rather than later. A phased handover significantly reduces disruption and can help preserve business value.

Tax and estate planning

Another key part of succession planning is to work with your advisers to minimise inheritance tax and capital gains exposure when transferring shares.

Proactive planning is key

For most business owners, your business is your legacy and your pension. Whether your aim is to grow, sell, or pass it on, proactive planning is always key when it comes to future-proofing your business.

Lodders’ Corporate team helps clients selling and buying businesses typically in the £3-20m deal size range, as well as on group reorganisations and related corporate matters. For a friendly, confidential chat, please contact Graham Spalding or Evgeni Pratashchyk in our Business Services group. Our team will be very happy to help.