Business Exit Strategies
When planning for a sale, starting early is key to achieving the best results that align with your personal goals. Planning your business exit ensures owners maximise the value of their company and minimise the tax burden when they exit.
Discuss what options are available when exiting a business
Over 90% of owner managed businesses fail to achieve a sale event. This is because most owner managers neglect to implement a business model that drives value, and they fail to create a business that can survive without the founder at the helm.
Having robust financial performance and a dedicated management team is essential. Being able to show profitable recurring revenue is also advantageous, especially when building your business exit strategy.
We can help you build a strategy that guides you towards a sale event that is equally aligned with your personal ambitions, both in respect of the sale and how to protect and grow the value you will receive from the sale of your business.
Progeny Law & Tax are authorised and regulated by the Solicitors’ Regulation Authority, meaning we are dedicated to upholding professional standards within the industry.Â
Our experience of helping clients administer MBOs and MBIs across a number of sectors means that we are well positioned to provide the guidance and expertise needed to navigate these complex processes.
With complementary services provided by our private legal team and tax teams, we can provide truly holistic support for when it comes to selling your business.
Build a business exit strategy
When it comes to selling your business, there are key factors that impact its overall value, some of which can certainly influence the value of your business more than others.
Whilst a traditional sale to a competitor or supplier in most cases holds the most value, it doesn’t have to be your only option. If you have a strong management team you can start to explore the following:
01
Management Buyouts (MBO)
We have worked with both owners selling to management and management teams backed by private equity who are buying the business they work in.
02
Vendor Initiated Management Buyouts (VIMBO)
The management team can use the cash resources of the business to finance the deal, which means that little or no third-party funding is required. The benefit for a business owner is that they are able to minimise their risk whilst still realising the value they have created in the business.
03
Employee Ownership Trusts (EOT)
With an EOT, you’re handing over control of the business to the employees so they’ll feel much more engaged in the future of the business. It also tends to be an easier transaction to negotiate too, as you are selling the business to employees who already know the business.
Business Exiting guides
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Frequently Asked Questions
A business exit strategy prepares you and your business for a sale event. It can help you simultaneously plan for a smooth transition that maximises the value from exiting whilst being aligned with your personal goals.
At Progeny we specialise in owner managers, not sectors. We see the individual as paramount. We can help you to navigate stressful and tricky transactions regardless of what sector you are in.
Consult expert advice before talking to others about a sale. Keep the team involved to a minimum. Use non-disclosure agreements. These can be an essential tool in helping to ensure confidentiality. Don’t use a work email addresses to communicate about the sale. Hold back particularly commercially sensitive information until you are confident that the sale will complete.
There are many options when it comes to exiting a business, our video on exit route options should get your started on potential options.
Usually you would be looking at legal and corporate finances fees, whereas at Progeny we can provide a complementary meeting with both our tax and wealth adviser teams.
- Uncovering a liability in the business that was previously undiscovered
- Market conditions changing drastically, significantly impact the buyers’ market.
- If a business is not performing at its full potential.
- The business is overly reliant on the founder shareholder.
Having a financial director will certainly impact buyer confidence in the financial data you provide, though it may not change the overall price.
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