Being the owner of a successful business means you have worked hard for years to build the business from the ground up to where it is now. When the time comes to exit the business you want to be rewarded for your hard work and get the best possible deal. There are several different exit options available so it is important to understand why you want to exit the business in order to be able to choose the right option for you. For example, you may want to move on to a different market, you may have reached retirement and want to realise your investment or maybe you had a fall-out with your business co-owners.
Whatever the reason, being prepared well in advance for when the time comes to exit and choosing the right exit option is very important. Being able to exit the business with a good deal does not happen overnight. You will need to plan and prepare in advance and get professional advice early on in the process to ensure you avoid the risk of missing out on great opportunities or ending up with a bad deal.
One of the most commonly used exit options is to sell the business to a competitor or a business looking to enter a new market. This is usually called a “strategic acquisition” and assuming the business is capable of attracting the interest of the right kind of buyer this exit option can be very profitable for the exiting business owner.
Another option is to sell the business to its existing management team. This is called a “management buy-out” and it is a corporate transaction available to businesses who have a distinct management team from the business owners. The management team may be willing to acquire the business in order to gain direct control of it and be able to shape its future growth. Usually one or more private equity investors will partner with the management team to buy the business from its existing shareholders. Selling to the existing management team responsible for the day-to-day decisions should be relatively straight forward and hassle free given that the management team already knows the business, sometimes even better than its owner.
If you have business partners they may be willing to purchase your interest in the business and allow you to exit. This again should be straightforward and hassle free assuming that both you and the purchasing business partner are involved in and familiar with the business.
Floating the business on a stock market means going from private ownership to public ownership. This process is usually available for larger companies that have reached substantial growth to allow them to attract public interest. The process can be complicated and long but it can also be very profitable for the exiting business owner.
Sometimes the reason a business owner wants to exit is because the business is no longer profitable. If that is the case then liquidating the business may be the only option available. Liquidation is the procedure through which the assets of a company are realised and distributed to creditors in satisfaction of its debts. Usually, following the completion of the liquidation process, the company is dissolved.
Whatever the reason you want to exit choosing the right option will help you to strike the best deal possible and get the best price for your investment and years of hard work. Preparation and getting professional advice early on in the process is the key to a successful exit outcome.
Our corporate team can help you prepare and decide which option will be better for you and assist you through the process of selling your business.