It’s probably not surprising, given recent political instability, that 32% of business owners have cited this as a motivating factor, but this was matched by changes in personal circumstances for a further 32%, and a focus on retirement planning (30%) was another key driver.
The research also delves into how these business owners plan to exit. Two in five (41%) are considering a full or partial sale to private equity, 40% are looking at transitioning ownership to their employees and 39% want to move the business to family members or the next generation and 26% are looking to exit to a trade buyer.
Deciding exactly when and how to exit a business is primarily driven by two factors, the financial impact, and perhaps more influential, the personal/emotional impact. Running a business is rarely easy, but the last few years have been incredibly challenging, and will undoubtedly have had a knock-on impact on how business owners think and feel about running their business now, and into the future. Finding the right balance between these two factors, especially if different stakeholders have different views, is critical to delivering the right deal.
For any business owner, even if exit plans are in their infancy or just on the horizon, early planning is key. Succession plans should be thought out over time and continually updated as personal and economic situations change, especially if the plan is to keep it in the family. There are many things to think about, from the value of the business to the tax implications and from the impact on customers and clients to the impact on staff.
There is no time like the present to start planning your exit and indeed it is never too early to start thinking about it. Ensuring you have a smooth transition is one of the most important parts of running a business, don’t let all the hard work that has gone into making the business successful go to waste. Consider the right type of exit, at the right time. The most successful exits are those which are planned well in advance.
There are many different exit strategies that you could choose. From a sale to private equity or trade, or indeed a family transition. All come with unique challenges and opportunities to consider. For example, a sale to private equity or trade would likely result in instant liquidity, however a transition to a family member would likely mean a longer time horizon for your money but great continuity. The key is to understand the pros and cons of each option and to choose the one that works best for you and your business.
If in any doubt on what is best for you, your business or your family, speak to an expert who can help develop a plan that works to achieve your goals.
16/11/2023. As a business leader, you may be thinking about your succession options to ensure your business remains in safe hands when you decide to exit. With a range of options available from family succession, transition to employees or a management buyout there are a number of areas to consider.
30/11/23. It doesn’t matter whether you are five months or five years out from sale, planning is crucial to ensure you can achieve the best outcome to suit both your business and personal objectives.
24/01/2023. Selling a business is often the most important decision many owners will take. Having invested considerable time, money, energy and emotion into a business, ensuring maximum return on that investment is extremely important.
24/04/2023. If you wish to exit your business, there are a range of options available. You may consider selling your business to a third-party trade buyer in a trade sale.
25/08/2023. You’re selling your company. Is purchaser tax due diligence likely to create any problems for you? It would certainly be better to know in advance.
24/04/2023. Private equity investment focuses on securing capital that can be used to facilitate your growth plans or de-risk your investment by extracting capital from the business.
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