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Exit Planning

most of them only have an indefinite idea about how they might eventually sell their business.

Business Exit Strategy

When entrepreneurs undertake their new business venture, the successful ones will broadly have a concrete idea, a solid mapped out path to profitability or a good business plan.

But most of them only have an indefinite idea about how they might eventually sell their business. It may astonish you to know that the best time to start thinking about a possible exit is at the beginning.

We are the specialist in business strategy, succession planning and exit. Give us a call or email to know our expertise and how we might help you reaching out the best and most cost and tax efficient decisions.

Typically, owner managed small businesses which come under two groups.

The first type, truthfully, is difficult to sell. These kind of businesses, are broadly just a wrapper(often in the form of a limited company) around the experience and skills of their founder.

And the biggest problem is, however, when the founder quits for obvious reasons, the businesses ceases to exist.

Complex Exit plan strategies

An exit strategy can have multiple meanings and types—it doesn’t just cover the instance of starting a business with a view to expanding it to a size and value where you sell out. Types of exit can include:

  • Death or serious illness
  • Family business succession
  • A staggered exit dependent on gradual dilution of ownership beginning with new investor coming in to provide growth
  • Management buy out or buy in
  • A defensive exit – for example where the business starts struggling and you perhaps have provided personal guarantees for borrowings
  • Selling parts of the business in solitary in which case a group company structure might be beneficial from an early stage, such as intellectual property rights in a different company from other facets of the business.

Dependency on the founder is problematic

Many businesses fall into this category. Decorators, painters, freelancers, painters and consultants of all types are all vulnerable to this problem. But even businesses with many employees that depend heavily on the experience, skills or contacts of the founder have this problem too.

The second form of business is on protective ground when it comes to an exit. These businesses can still be managed by owner and might even still be fairly based on their founder, but they are feasible in their own right. As a consequence they have an innate value to a potential buyer.

All is well for owner managers

Many business owners are somewhere on the range between these extremes. And with a bit of forward planning it is viable in most cases to move your business several grooves closer to the self-sustaining end of the range.

For instance, a property surveyor who works on his own. He is more of a self-employed freelancer for the objectives of our description above.

Still there are many things he can do to make his business more saleable when it is the time of his retirement. The likelihood has a wider base of contacts-estate agents, architects, builders and property developers who frequently give him the work.

Given adequate time, he could manage these relationships, but from the beginning to contract out this work to other surveyors on his payroll. With saving time by not having to carry out the surveying jobs, he might be capable of further enhancing his professional relationships and solicit a bit more work. That might mean he now has adequate work for two recently qualified surveyors.

Meanwhile, he perhaps require reviewing their work and schmooze the clients, but over time, he can begin to extract himself. If funds allow, he could also accept on a captivating business development manager who would possibly do a rather better job of canvassing the new business.

Also, a business that continues to grow with him or sell as a self-sustaining bolt-on to another firm of estate agents or surveyors.

Strategic and Exit Planning Strategists

At Nexa Accountants, we help small business owners, start, plan, grow for progression and sell their businesses. If you would like to get help at any of your entrepreneurial stage or obtain a quote for our services, give us a call or leave your number for our business representative to call you back.

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