Entrepreneurs need to clear plan of how they intend to let go of their company, a gathering of business leaders was told.

Roger Smith, the fifth generation of his family to run Carlisle-based Thomas Graham and entrepreneurs Kay Berry, Bernel Ltd and Barry Maxey of Hospice at Home in Carlisle gave their candid accounts of succession planning at the third Armstrong Watson Business Owners Forum.

Paul Dickson, chief executive and managing partner at Armstrong Watson, said the results of this year’s family business owners survey sparked the theme for its third and final instalment of the popular business breakfast.

The survey found that 59 per cent of respondents were planning to exit their business in the next five to 10 years.

While 40 per cent planned to hand over the business to their children, 20 per cent were looking to sell to a third party and seven per cent to their management team.

But most interestingly, he said, 51 per cent were unsure of their business was structured properly for sale or hand over.

Roger Smith, managing director of Thomas Graham, said he would look to hand the business down to the next generation.

“I really want to go to sixth generation but only if it is right for the business and right for them,” said Mr Smith, who started working for the company at 15 years before rising to the position of MD at 30.

“I was never pressurised, and that was important to me.”

Kay Berry ran 10 Costa Coffee stores for 10 years and employed 150 people, through her franchise Purple World Limited. She sold to another franchise partner before heading off to set up her new company Bernel Ltd.

“I always had a plan – a start, middle and end,” she said.

“It had been to have 10 stores in 10 years and then get out of there – and that’s what I achieved.”

She described going through the sales process as “possibly the most stressful time of my life” and said that surrounding herself with experts had been key to getting the deal over the line.

The sentiment was echoed by Barry Maxey, who said the sale of his business stretched from a 12-month process to five years.

“It was quite a lot of emotion and stress while still trying to carry on and do the day job,” he said.

When asked if he had a tip to entrepreneurs looking to exit their business, he added: “Be open minded to change and remove as much of the emotion out of the whole process as possible.”

Jim Meakin, Armstrong Watson’s head of tax and partner, also stressed the need for good housekeeping, adding: “This is the most important transaction people will ever undertake during their lifetime so it’s essential they take expert tax advice - and sooner rather than later.”

“Long term tax planning is imperative.”

Michael Walby, partner in the corporate team at Burnetts, said early exit planning was essential for the sake of the business, its employees and to ensure the owner secured a good deal.

“Get your house in order now,” he said.

“It lessens risk of causing delays, and damaging the price, which can get chipped away if there are issues with the business.”

Mr Walby, who has advised on the sale of several Cumbrian businesses to buyers from outside the county in the last few years, including Zoo Hardware and Denton Tyres, said that entrepreneurs should always be ready for an approach.

“I know that bigger businesses are looking to buy in the region,” he said.