If you’re asking this question, you’re already on the right path to a successful business sale. A business exit strategy is highly valuable at any stage of your business journey, but even if you appreciate this fact, it can be difficult to identify all exit options and know which one is right for you.
Let us outline three practical options that could work for you.
1. Sell Your Business
This is a common exit strategy and one that is ideal for anyone who is ready to completely step away from their business, either to retire or to pursue other business interests. Either of these options requires getting the right price for your business so this strategy works best with detailed advance planning.
If you know that someday you will relinquish any involvement with your business, you should be building sellability into your core activities.
This will help you build a valuable and attractive prospect for buyers, and hopefully give you the financial freedom you need to move forward. It can take time to find the right buyer, so being prepared early has a distinct advantage, but equally the right buyer could be just around the corner. If you’ve been preparing your business for sale for some time, you’ll be prepared for either of these scenarios.
2. Leave the Business to Someone You Trust
This exit strategy is a particularly popular choice for family-based businesses.
If you’ve poured the best part of your working years into building your business, it’s understandable that you may want to hand the reins over to someone you trust, over an anonymous buyer. As with selling to a third party, you should build this option into your business activities at the earliest possible stages.
This will allow you to grow the sellability of your business and ensure you are passing on something of real value. This option has an added advantage as you will likely work alongside your successor, giving you the opportunity to transfer your knowledge, increasing the chance of a smooth transition.
3. Reduce Your Involvement
There’s nothing to say your business exit strategy should be all or nothing.
You can choose to reduce your daily involvement but still retain some participation at a strategic level. In many ways, this can offer you the best of both worlds – personal freedom to do what you want, but with the option to remain close to your business.
This option works well in stages, gradually reducing your involvement to an agreed timescale, giving your and your team plenty of time adjust to new responsibilities and ensuring a smooth handover when the time comes to finally step back.
Help with Your Business Exit Planning
We know planning your exit is a big decision, which is why we’ve put together a free checklist of the top considerations to start your thinking in this important area.