Bobby Lane, a partner at Shelley Stock Hutter LLP gives his top tips on exit strategy.
Do plan ahead if at all possible
On the proviso that you don’t have to exit your business imminently, perhaps due to poor health, do aim to draw up a three year exit strategy. Too many solvent businesses end up being wound down rather than sold, because the business owner didn’t plan and couldn’t find a buyer. He or she could have reaped the benefits and had additional money to spend in retirement.
Do make sure you have the right people in place to make a sale more attractive
A good exit plan should be clear on:
a) Who in your company will succeed you in your role
b) Ways that your role could be delegated to perhaps 2 or 3 other people in the company
c) If you don’t feel you have the right person/people then start recruiting
Do be realistic about the value of your business
After all the hard years of building up your business, you quite rightly want to be rewarded. But do be realistic about the value of your company and be prepared to negotiate with any potential buyers. If you get hung up on say a price £100,000 above what the buyer is prepared to pay, you could find you end up with nothing.
Do keep focused on your business right up to the sale /winding up the business
It’s easy to become distracted if you know that you will be exiting the business in a couple of years time. Try not to lose the passion and vision you had in the earlier stages of the business. If you take your eye of the ball for too long, it could affect staff morale, business growth and ultimately the value of the company.
Don’t look at the exit as the end..
Just because you are relinquishing control of the company, it doesn’t have to be the end. After the sale, you could go on to be a Non-Executive Director or consultant to the company and still make time for an 18 hole round of golf!