Exiting Your Business: A Comprehensive Guide to a Graceful Exit
The swan is often seen as the archetypal image of a graceful person or business – beautiful and serene, as far as anyone can see, but paddling furiously under the surface. But while this may be a good description of how your business manages the daily ups and downs of customers, suppliers and technology – this is not a recommended approach when it comes to exiting your business.
The secret to making a graceful exit from your business is proper planning and plenty of time… in fact it has been said that the first thing you should do when starting a business is plan your exit! We might not go that far, but you get the idea that you should plan well in advance of wanting to take that step.
Exiting your business – Why plan ahead?
It’s an all too common story, an entrepreneur who has worked hard on building a business they are rightly proud of but hasn’t given any thought to an exit. They quickly discover that when the time comes, the terms of their own exit are being dictated to them rather than being master of their own destiny.
Of course, it isn’t just about the owner… a company sale has an impact on all stakeholders – from loyal customers to dedicated staff. While your primary motivations might be personal, I am certain that knowing your staff and customers will be well looked after is an important consideration.
A hasty sale that is not properly planned will impact on three key areas that drive the mechanics of a good sale:
- Timing – an ideal scenario is to be able to take the business to market when you are ready to. Planning towards a goal will allow you to avoid the perils of feeling you have to take the first offer that comes, even though you are not ready; or even worse, missing the boat and getting trapped in a business you no longer want to be in.
- Choice – one of the most powerful advantages when it comes to a sale is the element of choice. Planning your exit properly will ensure you attract a strong pool of credible acquirers to choose from.
- Health – the health of your business at time of sale will dictate the valuation ranges you can realistically expect to receive. Effective planning will allow you to take your business to market when it is in its prime.
But where it all starts is in being able to articulate one very important piece of information…
Knowing what you want when you exit your business
What do you want, is a very important question and the first step to planning your exit. Why not do this exercise right now?
- Take a piece of paper and write at the very top in capital letters – EXIT GOAL, then write down what you want to do when you exit your business. For many this will be to retire, for some it will be to reinvest, or pursue other interests.
- Under that write AGE and put down the age you would like to be when you achieve this exit. If you are already that age, or it has already passed, don’t panic – we can still help, send me an email and let’s talk.
- Next, write two lists. In the first list write down what you think you need in order to pursue your goal. Try to avoid financial detail, that will come later, for example if you plan to invest then write down “investment capital”, but not how much you might need.
- In the second list write down what you think your business needs in order for you to be able to exit. Again, try to avoid financial detail at this stage. Broad terms are fine, for example; “increased sales”, “stronger management team”, “increase diversity of client base.”
You now have the beginnings of an exit plan – you know where you want to go, how long you have to get there, and a rough idea of what you need to put in place achieve it.
The details of your successful exit
Of course, where most planning exercises get stuck is in the details. This is where we would recommend getting some professional advice. Our recent blog: Can’t See The Woods For The Trees, explains the value of independent advice. A combination of good advice from a company like Entrepreneurs Hub and a wealth management professional will help you put some figures on those plans and we can also help with putting those plans together and seeing them through.
If you want to find out more, then please get in touch; free and with no obligation. Or why not attend one of our confidential and discreet webinars? Register here.
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FAQs – Selling your company
How do I sell my business?
At Entrepreneurs Hub, we talk about five key areas that make the difference between success and failure when selling your business. Read more…
How much can I sell my business for?
Determining your business’s value is more than just calculating a number it’s complex with key factors, that said the basic equation is actually quite simple. Read more…
How long does it take to sell my business?
The timeline varies depending on the complexity of the deal and how ready the business is for sale. On average, the process takes around twelve months – sometimes less, sometimes more.
While preparing your business for sale, Entrepreneurs Hub conducts in-depth research to identify potential acquirers. You’ll have the opportunity to review and approve this list before we make any approaches. Once the business is fully prepared – often the most time-consuming step, we begin marketing it. Typically, you’ll start seeing initial interest within a few months, with follow-up meetings happening shortly after.
As these meetings progress – coordinated and facilitated by Entrepreneurs Hub, you’ll begin receiving initial offers. At this stage, we’ll help you assess the strategic fit between your business and potential buyers. When you decide to move forward with an offer, an exclusivity period begins, during which the acquirer conducts Due Diligence (DD).
The DD phase typically lasts two to three months, depending on the complexity of your business. Once complete, the sale is finalised, and you’ve successfully sold your company.
How do I sell my business quickly?
Selling a business quickly is possible, but speed shouldn’t come at the expense of value or deal security Read more…
When is the best time to sell?
Selling your business is a major milestone, and the start of an exciting new chapter, whether that means new ventures or a well-earned retirement.
In our experience, the best time to sell is when you don’t need to – when your business is performing well – not necessarily tied to the calendar. That said, timing can still play a role.
Timing the Market
Strong economic conditions, sector growth, and buyer confidence boost valuations. Don’t wait for a “perfect” market – a well-prepared, well-performing business sells in any climate.
Plan Ahead (12–18 Months)
The best outcomes come from early planning: clean financials, solid forecasting and growth potential.
Spring & Autumn Are Active Periods
The M&A market is typically busier in spring and autumn while summer and winter tend to be slower due to holidays and year-end distractions. However, the unpredictability of deals and negotiations makes this hard to target. We do deals all throughout the year – the key is to work with someone who can keep driving the deal forward whenever it happens.
Financial Year- End
Selling your business well is a long process and aiming for your financial year-end milestone is a virtually impossible task. But it is worth bearing your financial year in mind as buyers will want to review the most up-to-date accounts available.
The best time to sell is when your business is ready, and you are too. With the right preparation and positioning the right timing follows naturally.
Can I sell my business online?
Yes, you absolutely can sell a business online. Many platforms specialise in connecting business sellers with buyers. Read more…