When you start your business all your energy goes into product or service development, marketing and making sales you certainly don't think about your exit strategy.
Over the years as your business grows your focus may move to build a stronger team and to innovate to stay ahead of your competition. But at what stage do you start to plan your exit strategy?
The earlier you begin to work on this the better. There are many different ways in which you can exit from your business; in this blog, we are going to cover a few of these. Our next blog will outline some steps that will help you achieve a smooth exit from your business. Here are five options available for you to exit your business
Close your business
The most common exit strategy, especially for sole traders, is to draw profits from the business over time and then close the company down. You may be able to sell any assets such as tools, machinery and vehicles. This works if the business is entirely reliant on you as an individual but will not necessarily give you the best return when you exit.
Move to a family member
Many business owners plan to leave their business to a family member. This is a good option if the person taking on the company is interested and has the skills to continue to run the business successfully. It also means that you can stay on in an advisory role. However, it can lead to family conflict so be aware of this and plan carefully to ensure all family members are happy with the decision.
Management Buy-Out
If you have built a team that is enthusiastic and have the skills to take on the business, this may be an excellent option. They will already know how things are done within the company and you can prepare them over time and ensure all processes are in place for a smooth transition.
Sell on the open market
This is the most popular exit strategy that profitable businesses opt for. The business is sold to the highest bidder, and you can get the best return on your investment. To maximise the sale opportunity you need to make sure that there is clear evidence that your business is profitable and there is potential for growth.
Acquisitions
You can position your business so that it is attractive for another company to buy it. Businesses that are ambitious to grow fast often choose the acquisition route because it allows them to purchase complementary business activities. However in some cases acquire a company to eliminate their competition, in these cases, there is no guarantee that the staff will retain their jobs.
If you would like to start considering your options for the best exit strategy please do speak to us by calling 01623 490 120 or email