Let’s face it. Most people don’t start a business thinking about how they’ll end it, but one day, that time will come. Whether you’re eyeing retirement, a new venture, or just fancy a break from the chaos, exiting your business is a move you only get to make once, so you want to get it right.
Our advice? Start planning for it sooner rather than later. Many business owners wait too long to start thinking about it, and that never leads to the best decision being made. So that’s where this guide comes in. Here are four steps that you need to take now, so you can start planning an exit that actually works for you (when the time comes).
Step one: figure out if it’s the right time
You might be thinking, “Am I done here?” or “Is it the right time to exit?”. That’s not always easy to answer either. Yes, your decision will be about timing, but it should also be about gut instinct and knowing when to cash in or step back.
If you’re on the fence, start here: Stick or twist? Deciding the future of your business (and whether it’s time to exit)
This blog walks you through the emotional and strategic triggers that might signal it’s time to start preparing for exiting your business, and what your options are depending on what you want from life after.
Step two: get the right people in place
Hard truth: if the business can’t run without you, it’s not ready to be sold. Why? Because no one’s buying a company where every decision depends on the one person that’s left. This is where having the right people in the right seats matters.
Our blog, “Talent management planning: the key to accelerating business growth” covers how to build a team that makes you less essential, which is exactly what you want when you’re thinking about exiting your business without it falling apart behind you.
| Talking about the right people… It’s smart to have an accountant in your corner! Talk to us! Involve us in your early discussions, and we can help you choose the best option and create a plan that you actually execute. |
Step three: know your exit options
There’s more than one way to step back from your business depending on your circumstances. Here are some of the main business exit strategies:
1. Sell the business (and don’t get rinsed by HMRC)
Selling outright? Great, but don’t get caught off guard when the taxman comes knocking.
To help you with this strategy, our blog “Considering selling a business? Don’t forget the tax implications” breaks down what you’ll owe, what you can deduct, and how to structure the sale for maximum tax efficiency.
2. Close it cleanly with an MVL
If your business is solvent and you simply want to wind it down rather than sell, a Members’ Voluntary Liquidation (MVL) could be your best option.
Our blog “Is a Members’ Voluntary Liquidation (MVL) right for you?” explains when and why an MVL makes sense, and how to exit in a tidy, tax-efficient way.
3. Sell to your employees
Selling to your employees via an Employee Ownership Trust keeps the business alive, rewards your team, and can come with juicy tax benefits. Perfect if you care about your business’s future (and want a nice tax outcome while you’re at it).
Read our blog on this strategy to find out more: Thinking of an Employee Share Ownership Trust as an exit route from your business?
4. Management Buyout (MBO)
If your leadership team already runs the show day to day, a management buyout could offer a smooth transition. Especially if you want to phase your exit over time.
Our blog “Management Buyout: key tax considerations for management” covers how to structure it, what to watch for, and how to avoid tax tripwires when exiting your business this way.
Step four: plan your life post-exit
Most guides stop at the sale, but we want you to think beyond that. After all, if you’re exiting your business, you’re not just ending a chapter, you’re starting a whole new one.
When planning and preparing to exit your business, make sure you’ve thought about what’s next, from financial planning to how you’ll spend your time. We’d suggest something more fulfilling than alphabetising your garage (unless that’s your thing)!
Ready to start planning?
Exiting your business isn’t something you wing at the last minute. Whether you’re years away or already halfway out the door, the earlier you start planning, the more choices and cash you’ll have.
| Need guidance? Talk to us! We’ll walk you through the financial, tax, and operational details to help you make the best choice for you. Not only that, but we’ll also help you build a proper plan for your exit.[email protected] |
