Every business owner will eventually face the question: How will I exit my business, and what will I walk away with? Whether you run a small, owner-managed enterprise or a growing company, having an exit strategy in place ensures a smoother transition and helps you maximise your financial return.
Why Plan Your Exit Early?
An exit strategy isn’t just about selling up when the time comes—it’s about controlling your financial future and ensuring the business continues successfully without you. The sooner you plan, the better positioned you’ll be to extract maximum value from your business.
Your Business Exit Options
1. Closing and Liquidation
For some businesses, liquidating assets and winding up operations can be the simplest option. Extracting value over time—by taking dividends or salary instead of reinvesting—helps owners maximise personal financial benefits before closing the business.
Pros:
- Quick and straightforward exit
- Immediate access to capital
Cons:
- Business ceases to exist
- No long-term legacy
2. Passing the Business to Family
Handing the business over to the next generation is an attractive option for those who want to maintain a legacy. However, statistics show that 60% of second-generation businesses fail, and 90% don’t survive to the third generation, making succession planning essential.
Pros:
- Keeps business in the family
- Potential for long-term continuity
Cons:
- Requires capable successors
- Can lead to family disputes if not properly planned
3. Employee Ownership Trusts (EOTs)
Employee Ownership Trusts are gaining popularity due to their tax advantages and ability to foster a strong workplace culture. Business owners can sell shares to employees tax-efficiently while securing the company’s future. Richer Sounds is a well-known example of a business using this structure.
Pros:
- Capital Gains Tax relief for sellers
- Potential for tax-free employee bonuses (£3,600 per year)
- Ensures business continuity
Cons:
- Requires structured management transition
- May not provide the highest immediate payout
4. Selling on the Open Market
The most common exit strategy, selling to another business or investor, can be lucrative but requires preparation to secure the best price. Early planning and expert valuation can significantly increase the business’s attractiveness to buyers.
Pros:
- Potentially maximises financial return
- Ideal for owners looking to retire
Cons:
- Hard to value and sell without preparation
- May take time to find the right buyer
How Much Do You Need to Sell For?
Many business owners delay exiting because they overestimate the amount they need to retire comfortably. At Foresight, we help entrepreneurs assess how much they truly need from their business sale to maintain their lifestyle.
The right exit strategy depends on your personal and financial goals—whether that’s achieving financial freedom, leaving a lasting legacy, or ensuring your employees benefit from the company’s success.
Planning for Your Future
Regardless of the path you choose, having a well-thought-out exit strategy ensures you maximise your returns and minimise disruption. The earlier you start planning, the smoother the transition will be.
If you’d like to explore your options, speak to our team at Foresight Wealth Strategists. We work with experienced business consultants to help owners prepare, structure, and maximise the value of their exit. Get in touch today.
