Exiting a business

Reasons to exit

There are many reasons why business owners decide to exit a business. Some of the more common reasons are:

• it’s time to retire.
• the business is highly successful and the time is right to sell or merge with someone who sees your business as a good “strategic fit”.
• the business requires a massive injection of capital to support a substantial growth strategy and you decide to take it to an “initial public offering” (IPO)
• you receive an attractive offer for the business that is hard to refuse.
• a change in personal direction and the desire to use the proceeds of a Trade sale for other purposes.
• to transfer ownership to other family members as part of a succession planning strategy
• changes in personal circumstances, such as illness, old age, divorce or death of a substantial stakeholder.
• relocation of the business owner.
• the business is not doing well. This could be due to increased competition or unfavourable operating conditions that leave no other option than to close down  or wind up a business.
• the decision to sell the business to staff as part of a Management buyout strategy.
• The decision to sell all or part of your business to a new or existing partner.
• The business can no longer meet its debts as and when they fall due i.e. insolvency

How you exit your business is just as important as how you start it. The goal is to maximise the value of your company before converting it to cash and minimise the amount of time consumed.

It is important to consider the impact of your exit on your staff. Staff are one of the most valuable assets of your business whether as potential buyers of the business or as guardians of business goodwill when selling the business.

Getting your business exit-ready can be a complicated and lengthy process.

The length of time required to complete the process is directly related to the complexity of the business, the reasons underlying and the objectives of the decision to exit.

More information

You will need legal, accounting and tax advice to help you transition out of your business as smoothly and profitably as possible.