Why You Need a Business Exit Strategy

Do you have a business exit strategy? Whether you are looking to retire in the future or profit from a business sale some years down the road, it's never too early to plan. Page Kirk Partner James Haywood explains more.

Business owners put great efforts into the start-up processes of their business but sometimes forget that an exit strategy is also an essential part of business planning. Even smaller businesses need to have an exit strategy in place to ensure the best outcome, whether that is to generate maximum sale value of the company or to close down a business swiftly to minimise losses.

What is a business exit strategy?

A business exit strategy is a plan for how a business owner/founder will sell the business to another business or investors. An exit strategy may not be required for many years while a business is running but, at some point, it will be needed, especially when there is no successor within the business or family to take over..

When is an exit strategy required?

If an owner wants to retire, change career or maybe make a lucrative profit from a business sale, an exit strategy will need to be implemented to transfer the ownership. It may be that the business is bought out by a partner or employee, or a successful business could be sold to an external third party.

In the case where a business is losing money or is not profitable to be worthwhile continuing to operate, the exit strategy of liquidating the business may be the best solution. It may be that there is a significant change in market conditions that financially impacts the business, so the faster you can implement an exit strategy, the less money will be lost.

Pros of having a business exit strategy

There are many benefits to having a clear plan for a business exit strategy, including:

• The ability to deal with an unexpected event that impacts the business, either related to the market and business performance or personal reasons that leave you unable to work.
• Readiness for unexpected acquisition offers that could be too good to turn down.
• Having a clear plan for the future, which helps you to keep your short and long-term business strategies on track.
• Minimisation of losses as soon as possible if your business goes into debt.
• The opportunity to be free of all the responsibilities of running the business.

Even if you are not considering selling your business at this time and you are making healthy profits, having a defined exit strategy will give you peace of mind and prepare you for any unexpected situations that you need to react quickly to.

How Page Kirk can help

Page Kirk provides an expert business exit strategy service, so we can help to ensure your business sells for the maximum value, whether you are selling now or may consider a sale in the future. We can also help to ensure all the legal requirements, including tax obligations, are fulfilled for the transfer of ownership.

To find out more, call 0115 955 5500 or email enquiries@pagekirk.co.uk