Business Exit Planning
Don’t let all those years of hard work building up your business just disappear when you eventually decide to retire.
At Jacobs Allen we take you through the different ‘when and how’ options to achieve the best result for you with as little stress as possible.
What Is a Business Exit Strategy?
A business Exit strategy is a plan that a founder or owner of a business makes to exit their business.
The two aims of the plan are:
- Increase the value
- Make it easier to sell
What are the 5 strategies of exit planning?
The 5 strategies of exit planning are:
- Passing onto family
- Selling to management (Management Buyout)
- Selling to employees (Employee Ownership Trust)
- Finding a trade buyer
- Winding Up
Business Exit Strategy and Liquidation
The winding-up route usually generates the least return for the owners, often much less than the net assets figure indicates and is really the option of the last resort.
The importance of having a business exit plan
It is necessary to plan in advance so that actions can be implemented in good time in order to achieve the aims of increasing the value of a business and making it easier to sell.
Exit planning usually requires a minimum of 3 years but in all cases, some planning is better than none.
How to plan an exit strategy
The steps are:
- Consider what is the best time to sell
- Consider who might be the potential purchasers
- Decide on your preferred exit route
- Identify the potential risks for a purchaser and plan to minimise these
- Create a prioritised action plan – with responsibilities, timings and follow up
- Preparing the company for sale
Our team has a history of successfully helping businesses complete exit plans which means we have the expertise and proven track record to help with your plans.
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Latest Video: Business Disposals
Chris Kelly of Jacobs Allen talks about important considerations when you are thinking about planning for exiting a business.
Watch our video to find out more!
The best exit strategy is one that aligns with your personal and financial objectives while ensuring the continuity and growth of your business beyond your departure. One of the most favourable exit strategies is an acquisition by a larger company. This option often provides access to extra resources, new markets, and an opportunity to scale up the business.
Startups can exit their business through various methods such acquisition, merger, and initial public offering. Other exit options could include management buyouts or shutting down the business if there are no other viable options.
Business exit planning is important for several key reasons: It ensures that business owners have a thorough strategy in place to exit. By planning ahead, owners can maximize the value of their business on exit. It minimizes the potential risks and challenges that could arise during the transition process. Preparation enables challenges to be mitigated, safeguarding the business’s continuity. Exit planning enables business owners to consider and address tax, legal and estate planning issues to maximise their financial position. A future plan inspires confidence in employees, customers, and investors.
Business exit planning is the process of preparing business owners for a successful departure from their company. It involves developing a strategy to transition out of the business, whether through a sale, passing it on to successors or liquidation. The objective of is to maximize the value of the business and ensure a smooth transition.