"All you’ve got to do is decide to go and the hardest part is over."
Tony Wheeler
Publishing Entrepreneur
How to exit your business
Every exit is an entry elsewhere.
New dreams happen daily.Â
Sooner or later, you’re going to leave your business, whether it’s through retirement or reaching the end of your life. However, there may be other reasons that mean you have to leave. You might want to try something new. You might need the funds tied up in your business or just wish to pass on the trade to a new owner or family member.
Either way, it’s important to plan for these circumstances so you can leave when you are ready, without having too much of an effect on the business.
Here To Help
Exiting your business is seldom as straight-forward as people think. There’s much to consider and many financial responsibilities you will have to ensure you’ve covered before you can get started.
 If you are able to generate an exit plan, you should be able to have a smooth transition period when exiting your business.  You’ll be protecting your business, as well as yourself; you don’t want to waste the hard work you’ve put into it over the years.
Across all the pages in this section, we provide a series of guides to help you find what you should be looking for, particularly when it comes to exiting your business to the right levels, so when that time comes, we can help you…
CHOOSE THE ADVISER WHO UNDERSTANDS YOUR NEEDS.
Why would I leave?
Either way, it’s important to plan for these circumstances so you can leave when you are ready, without having too much of an effect on the business.
If you are able to generate an exit plan, you should be able to have a smooth transition period when exiting your business. You’ll be protecting your business, as well as yourself; you don’t want to waste the hard work you’ve put into it over the years.
How can I leave my business?
Feel like you need to spread your wings?
Your main options are:
- sell the business
- pass it on to a family member
- negotiate a management takeover
- wind the business down
Within your business plan, make sure you include an exit strategy with possible options in case your circumstances change. What do you want to achieve from exiting? Do you want to make the business stronger, or do you want to leave and get as much as you can from it? Are you going to pass it on to family members, or are you going to close it completely?
Should I sell it?
If you want to make a profit or move on to something new, then selling your business is probably the best route to take. You could choose to sell just the shares, or the trade and assets so make sure you’re clear what you are putting on the market.
Make sure you explore a lot of options before agreeing on a sale. Several bidders at a time can increase your sale price and working with an accountant can help you identify the best ways to bring value from your business.
Ensure you have ironed out any flaws in your business before a buyer completes a due diligence check. To do this, you’ll probably need to acquire a solicitor. Plan your sale in advance and make sure you are on track and on top of it, as it can take a long time to complete the process.
Can I keep it in the family?
This is a great tradition and running a successful family business is something to be proud of for succeeding generations. But make sure you have handed the reins over to the right person, that they can run it efficiently and get the best out of the company.
To transfer the business, you will need to gain a transfer of power and assets. Try and fit in a transitional period, so that you can pass the company over smoothly with introduction lessons.
A management takeover
There are three options under this umbrella. You could have a management buy-out (MBO) situation, that allows the business to be bought by an existing management team, or one where a new external team takes over (a management buy-in). There is also a Buy in Management, buy out, where the business is bought by existing and external management.
These routes are the quickest ways to exit a business. Make sure in any circumstance that involves an external team however is vetted and that there will be no conflict between those existing team members and the new.
These processes will require independent financial advice.
Should I wind the business down?
If there is no obvious buyer or family member to pass the business onto, it’s a good idea to generate a member’s voluntary liquidation. Closing the business will return all capital to shareholders before it dissolved. This process does have to be dealt with by a professional adviser as a lot of elements including tax, employees and pensions, need to be considered when winding down.
How can I get the best value?
Keeping an eye on market trends can help you know when best to sell your business. The financial climate and the availability of buyers will affect how much value you receive from your business when exiting.
Things like the history and future goals of the business will all be considered when valuing, as well as cash flow, turnover and profitability.
Keeping an eye on market trends can help you know when best to sell your business. The financial climate and the availability of buyers will affect how much value you receive from your business when exiting.
Things like the history and future goals of the business will all be considered when doing a valuation, as well as cash flow, turnover and profitability.
Abacus Associates manages the personal wealth of many people across the UK and over £1 billion of investments, providing clients with financial advice and access to investment products and services.
We do not charge for initial consultation meetings. If you would like a face-to-face meeting, feel free to pop over to our office or we can always can come to you.
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