At some point, every business owner reaches the big question: do I keep going, or is it time to exit?
Sometimes, the decision is forced – health issues, personal circumstances, or just sheer exhaustion. But more often than not, it comes down to one simple thing: are you still excited by your business?
- Are you working all hours and just feeling stressed and frustrated?
- Are you still passionate, motivated, and loving what you do?
- Or maybe you’re somewhere in the middle – content for now, but curious about your exit options?
No matter where you stand, thinking about your long-term future is always a smart move. So, let’s talk about what your options actually look like and whether it’s time to exit your business.
What are your exit options?
If you decide it’s time to exit your business, you’ve got a few different routes you can take.
- Sell to a third party
Selling your business to another company or an entrepreneur is a common exit route. If your business is profitable, has a strong customer base, and runs efficiently, you could sell at a solid price. This works particularly well in industries where larger companies are looking to acquire smaller ones to expand their market share.
- Sell a percentage of your business
If you’re not quite ready to completely step away, you could sell just a portion of your business to an investor or a strategic buyer. This allows you to take some cash off the table while still being involved in the company’s future.
- Sell to your management team (MBO)
A management buyout (MBO) is where your existing team buys the business from you. This can be a great option if you want the business to continue in familiar hands and you have a strong team who are ready to step up.
- Sell to your employees via an employee ownership trust (EOT)
An EOT is a way of selling your business to your employees – giving them ownership through a trust. It can be a brilliant way to maintain your business’s legacy, keep jobs secure, and reward the people who helped build your company. Plus, under current tax rules, the sale is tax-free for the business owner.
- Retain ownership but put in a strong management team
Not ready to sell but don’t want to be involved in the day-to-day running anymore? One option is to step back, bring in a great management team, and let them run the business while you retain ownership. You still benefit from profits, but you’re not dealing with the daily grind.
- Sell or transfer to family
If you want to keep the business in the family, you could pass it on to the next generation. But, and this is a big but, it’s important to have a clear plan. Just because someone is family doesn’t mean they’ll be the best person to run the business. Make sure they have the skills, interest, and leadership ability before handing over the reins.
Preparing for your exit
Even if you’re not planning to exit immediately, there are things you can start doing now to make sure you’re in the best position when the time comes. Here are a few ways to prepare for when it’s time to exit your business:
- Repurchase of shares
If you have multiple shareholders, structuring a share buyback could be part of your exit strategy. This involves the company buying back shares from departing shareholders, giving more control to the remaining ones.
- Grant share options to your team
Offering share options or minority shareholdings to key team members can make for a smoother transition when you exit. It gives your team a stake in the business, which increases their commitment and makes them more invested in its success.
- Set up a holding company
A holding company structure can be a tax-efficient way to manage your exit. It allows for better asset protection, flexibility in selling parts of the business, and can make a sale more attractive to buyers.
Is it time to exit your business? Or to start thinking about your plan?
Whether you’re feeling burnt out and ready to leave, still excited but planning ahead, or just curious about your options, it’s always a good idea to have a long-term plan.
At JVCA, the friendly accountants, we regularly help business owners explore their exit options and structure their businesses in a way that works best for them.
So, if you’re thinking about your next move – whether that’s selling, restructuring, or just getting some clarity – let’s chat.
Drop us an email at [email protected] for a free initial discussion about your business’s future.
Because whether you stick or twist, making an informed decision is what really matters.
