Every business owner at some point will need to consider their exit, be that handing over to either the management team or family members, or selling to a third party.

It’s often a process that is neglected and research by Price Bailey strikingly found that less than one in four business owners have an exit plan in place.

For many of these business owners, the exit or sale will be a once-in-a-lifetime opportunity and it is important that all bases are covered in order to ensure that the best possible exit is secured.

And whilst this may naturally include value, it also includes consideration as to who the best party is to take the company forwards and build on what has often been a lifetime of effort, investment and work.

It is important, therefore, for business owners to begin to consider early on what their exit strategy could be and what they can be doing to maximise the opportunities that may be available.

Be aware of exit options

There is a multitude of options available when considering an exit, including selling to a strategic party, divestment to a financial buyer or selling to the management team.

Understanding these options to find the route that aligns best with the owner’s own ambitions is key.

There are also often pre-conceptions (and quite often misconceptions) about what these options involve, and so speaking to others that have experience with these routes or have been through the process themselves is extremely valuable.

If you want to learn about the different types of business exit strategies, read the various guides at Businesseek, a UK directory of businesses to buy.

Know what to expect

Business owners taking early advice on what the process will look like will be able to align this with their own objectives.

Timing can be crucial, and it is important that owners initiate the process early enough that they can control when they want to exit, rather than being left in a situation where it becomes a necessity.

Selling your business masterclass to take place in Manchester

With some sale processes taking up to a year and often handovers from exiting shareholders extending well beyond this, recognising that initiating a sale process does not necessarily mean a short-term exit is imperative for owners.

It is also important for owners to understand what will be expected from them and ensure that this is manageable alongside the continued running of the business.

Take advice

Consulting with experienced advisers ahead of initiating a process is a necessity to ensure that an owner’s affairs are suitably in order.

A mergers and acquisitions adviser can provide guidance on timelines and potential valuations to ensure these meet an owner’s expectations, however beyond this it is also important to speak to legal, financial and tax advisers to ensure the business and the individual(s) are prepared for the process to come.

Tax and financial planning particularly can be invaluable in ensuring that the proceeds from the sale are maximised and any necessary arrangements can be made ahead of an event.

Information is everything

Inevitably during a sale process, the business will be put under a level of scrutiny that won’t have occurred previously.

One of the main reasons that deals fall through is due to an inability to satisfy an acquirer’s requirements for information, and so having the processes and management systems in place that provide access to key (financial) information will retain confidence in a deal happening.

Entrepreneurs to share experiences of selling their businesses

There are a lot of considerations for any business owner contemplating an exit. Initiating conversations early will ensure that these considerations don’t become overwhelming and will allow the right procedures to be put in place to ensure a smooth process and maximise the opportunities available.

On June 22nd, Marktlink will be holding an invitation-only masterclass at Manchester’s Emirates Old Trafford cricket ground entitled ‘Optimising your business to be sale-ready’. The event will be hosted by award-winning journalist and executive editor of BusinessCloud, Chris Maguire. If you want to know more details email [email protected]