Planning your exit is not something you leave until the last minute. Done well, it can make the difference between walking away with what you deserve or watching value slip through your fingers. Exit planning is about getting your business in shape so that when you do sell or transition, the outcome matches your goals – both financial and personal.
Why start exit planning early?
Maximising the value of a business doesn’t happen overnight. Buyers dig deep during due diligence. So, if you wait until you’re ready to sell to start prepping, you’ve probably left value on the table. A solid exit plan gives you time to fix weak spots, improve key metrics, and choose the right moment and method for exit.
What goes into a great exit plan?
Focus on enhancing the factors that will make your business more attractive
For example, work on growing recurring revenues, trimming unnecessary costs to lift profits, broadening your customer base, and building a strong management team that can run the company without you.
Get your financials and records in order
Buyers will perform thorough due diligence. Therefore cleaning up your financial statements, ensuring you have up-to-date management accounts, and resolving any discrepancies up front will add tremendous value.
Plan for tax efficiency
Engage a tax advisor as part of your exit planning. The UK offers certain reliefs that can dramatically reduce the tax on a business sale. For instance, many business owners qualify for Business Asset Disposal Relief, formerly known as Entrepreneurs’ Relief, which can cut your capital gains tax rate to 10% on the first £1 million of gains when you sell your company. Ensure you meet the conditions, such as owning at least 5% of the company and being an employee or director for at least two years.
Consider timing and market conditions
Keep an eye on your industry’s M&A market. If valuations are currently high, it might be worth accelerating your exit. Conversely, if the market is down, and you have the flexibility, you might delay a sale until conditions improve. While you can’t time the market perfectly, being aware of it is part of a good exit strategy.
Assemble the right advisory team
Exiting is a complex process, you’ll benefit from experienced advisors. This often includes a corporate finance advisor or business broker, a solicitor, and your accountant/tax advisor. They will guide you through each step – from valuing the business, preparing an information memorandum for buyers, vetting offers, all the way to completion.
Plan for life after exit
This is more personal, but important, consider what you want after the sale. Do you want a clean break, or are you open to staying on for a transition period? Many buyers, especially private equity, may want the owner to remain for a handover or even retain a minority stake.
Exit planning is not just for retirement
Even if you’re not planning to step away for a few years, having an exit strategy is just smart business. Life throws curveballs – illness, burnout, unsolicited offers – and having a plan means you’re prepared, not scrambling.
Ready to get exit-ready?
At Wilson Partners, we help business owners prepare for and execute exits that deliver real value. From cleaning up financials to designing tax-efficient structures and navigating buyer negotiations, we bring the insight and support that makes a difference.
For a more in-depth overview of how business valuations are conducted across different scenarios, read our full guide to valuing a business – it covers all the critical areas you’ll want to consider.
Get in touch for a confidential discussion about how much your business could be worth and how to increase its value.
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