Four popular exit strategies

Every business, no matter how big or small, has to part with its owner or proprietor at some point. Situations can arise that cause you to sell your business or pass it down to younger family members.

At some point, in some way, you will part from your business. Fact.

That’s why it’s a good idea to plan your exit in advance so that you are constantly working towards this ultimate goal and that necessary procedures are in place, when needed, to finally part with your company – successfully.

Here are four options available to you:

Float your company

Floating your company on the stock market can be a hugely rewarding way to exit your business, or at least step back from it somewhat.

However, flotation is unsuitable for the majority of businesses given the size and growth needed to attract potential investors and to be permitted to float your company on the stock market.

If your company does not have secure revenue streams and strong growth prospects then you can eliminate floatation as an exit option from your business.

Sell your company

This can involve either selling to external buyers, or selling to internal buyers i.e. employees.

Although selling to internal buyers may not be as profitable as selling to a trade buyer, it can often be a simpler process given that they already understand the business and its operations.

Selling your business can be made easier if you can:

· Show year-on-year increasing profitability

· Create a high-quality product or service

· Develop an innovative product or own intellectual property

· Build a strong customer base

· Recruit a high-quality team

· Maintain premises and assets in good condition

Family succession

Family succession is a case of handing the business down to another generation; whether that is a son, daughter, cousin, or nephew.

This allows you to maintain some degree of involvement in the business and keep it ‘in the family’.

If you are planning to take this option, try to involve your chosen family member(s) in the business as early as possible, not only to enable them to get a grasp of the processes and procedures, but also to develop their interest in the business and encourage them to take this career route.

Close your business

This is the simplest way to part with your business.

It is often the case in ‘lifestyle’ type businesses that the owner delivers all value therefore deeming the business inoperable, and indeed unsellable, without their skills or knowledge.

To help you decide what exit option is most suitable for you and your business, get in touch with me, Bob Brown, today on 01709 810081.