Every business owner will need to create a business exit strategy at some point during their journey.
Planning your business exit might feel like something to think about later, especially if you’re just getting started or focused on growth. But having a clear exit strategy in place early on can make a big difference.
Whether you’re seeking investment or just want to stay in control of your future, funders and stakeholders will expect to see how you plan to eventually step back. And beyond that, an exit strategy can actually help shape your direction, manage risks, and support smarter decision making right now.
So how do you go about building one? What should you be thinking about? Let’s break it down.
First, what is a business exit strategy?
It’s a plan for the transition of business ownership. That may sound a bit daunting – but hear us out, it’s something most business owners will face at some point in their journey.
You might not want to be a business owner forever, or you may wish to leave one venture and start another. This could mean selling up, passing the reins to someone else, or being acquired by a larger company.
A clear exit plan doesn’t just help when the time comes, it also gives you direction now. It helps you build a business that’s easier to step away from, and more attractive to potential buyers or successors. Think of it as future-proofing, not just for you, but for your team and clients too.
So, how do you create a smart business exit strategy?
Prepare your finances
You’ll need to know your numbers and have your finances completely up to date, for both your business and as an individual. As a starting point, you’ll need to know your expenses, assets and figures like your profit and loss.
It’ll be much easier if you have a clear overview of your finances at all times, no matter what stage your business is at. This is where working with an accountant can come in handy right from the start.
Set objectives
Once you know your numbers, there are a few things you’ll really need to consider and ask yourself. What do you want to achieve by exiting your business? How do you want the business to run without your input?
Think beyond the transaction itself. What does a successful exit look like for you personally? Is it about maximising value, leaving a legacy, or freeing up time to explore something new? Your personal goals should shape your business exit just as much as the financials.
You’ll also need to weigh up your options in terms of what will work best for you. Is it a direct sale, a merger, or a family member taking over? Make sure you’ve thought about all your options and know exactly which route you’d like to take, and that it aligns with both your values and vision for the future.
Be aware of the business market
You’ll need to be able to give a clear insight into your current and future business market at the time of exit. This includes trends in supply and demand, the competitive landscape, and any economic factors that could affect your valuation.
Understanding who your potential buyers might be, and what they’re looking for, can also shape how you prepare. Are similar businesses being bought by competitors, private equity firms, or ambitious start-ups? Are values on the rise or in decline?
By staying in tune with your sector, you’ll be better positioned to time your exit well and present your business in the most compelling way to potential buyers or successors.
Outline a timeline
It’s beneficial to have a timeline for your business, along with when you’d ideally like to exit and how long you’d like the exit process to take. Whether your goal is five years away or fifteen, having a rough timeframe helps you stay focused and make decisions with the end in mind.
Build in key milestones along the way, things like getting a valuation, systemising operations, or finding the right buyer. Be realistic with your expectations and allow for flexibility – things can change quickly, whether it’s your own circumstances or market conditions. A well-considered timeline keeps you proactive rather than reactive.
Set clear business intentions
You need to outline what you’d like to happen with the business once you exit. This should help make it clear what your best route of exit is.
Would you want the business to wind down, or continue thriving under new leadership? Do you want it to stay true to your original vision, or are you open to it evolving under someone else?
Your intentions will influence everything from the kind of buyer you seek to how you prepare your team. Taking the time to define what success looks like after you’ve stepped away ensures you make decisions now that support that outcome.
Don’t skip the legalities
Whether you’re selling, handing over, or closing up shop, legal support is a must. A good solicitor will help you manage contracts, ownership changes and ensure everything’s done properly and in your best interest.
And when the time comes…. Communication is key
Once you’ve put your plan together and it’s time to either sell up, dissolve or handover, we really recommend that you clearly communicate with your team, stakeholders and customers. The exit shouldn’t come as a shock to anyone!
If everyone is in the know and communicated with regularly throughout the exit process, you’re more likely to retain staff members in the event you’re handing over to someone else. Communication will also help protect your business reputation and overall employee wellbeing.
Need help with your business exit strategy?
We’ve helped put together and implement many exit strategies over the years, for businesses of varying sizes, across sectors. Feel free to get in touch with us if you need help putting a strategy together or some guidance on navigating your exit.
