My colleague, Nick Palmer, recently wrote an interesting blog about the importance of planning your business exit strategy. Nick quoted some fascinating statistics from the 2017 Armstrong Watson Family Business Insight :
- 11% of business owners haven’t considered how their future exit will occur;
- 8% don’t plan to leave the business;
- 10% anticipate that the business will cease;
- 44% expect to pass or sell the business to a family member; and
- 27% hope to sell the business to a third party.
The Armstrong Watson Corporate Finance team has worked with many business owners to plan and implement their exit strategy. Whether you envisage passing your business on to the next generation, selling to a third party or the existing management team, early planning with a specialist advisor always pays dividends.
We would even argue that planning can help many of the 10% who anticipate their business will cease on their exit. There are nearly always steps that can be taken to make a business an attractive proposition to a future buyer.
There are many considerations to address when planning for future exit:
- How much is the business worth and is that sufficient to fund your future plans?
- Is the tax position fully understood? Planning early can enable us to put measures in place to minimise the tax liabilities on your exit. In some cases simple steps taken in advance have made a huge difference to the amount on tax payable.
- Are there any issues in the business that might reduce the price potential buyers will be prepared to pay? A pre-sale review will identify any potential areas for concern and steps can be put in place to fix these issues and ultimately maximise the value of the business.
- Perhaps you want to put provisions in place to reward key members of staff on your exit.
Armstrong Watson’s Corporate Finance team have the skills and experience to guide you through these decisions and to achieve your exit whether that be to retire and reap the due rewards of years of hard work or to move on to another business venture.