Preparing for exit

When it’s time for a change – whether you want to be free to start a new venture or to retire – a well-planned business exit strategy will secure the best value for you on the sale of your business.

Beginning two or more years ahead of your target exit date gives you time to make the business attractive to buyers and maximise valuable tax saving opportunities such as entrepreneurs’ relief. Advance planning also allows you to consider the impact of your exit on your inheritance tax planning.

Our team will help you prepare your business for sale so you can stay on track with the day-to-day trading. We will work with you on the vital task of turning it into a marketable company that appeals to your target buyers.

We can help you address these key areas, so your business and your personal financial circumstances are in the best possible shape at exit:

Provide a detailed independent view of your business – highlighting its strengths and any issues that may discourage buyers;

Build a strong exit plan – which is supported with detailed forecasts;

Recommend an exit option – such as a sale to a trade purchaser, cash out to shareholders, management buyout or a company flotation.

Prepare a statutory or voluntary audit – external verification of the business’s finances can be reassuring to potential buyers or funders and demonstrate transparency.

Retain staff in the business – taking care of your key people during the sale process is important. You want them to stay with the business and help keep your trading performance at optimum level. Share schemes can be a valuable way of rewarding employees that help you maximise the value of the business before and after the sale.

Get your business information organised – we can work with you to pull together information on your taxes, insurances, accounts, business plans, forecasts, intellectual property, staff and customer contracts and store them in a virtual data room. This will secure confidential information on your exit plan away from your day-to-day business activities.

Exit options

There are a number of exit options available:

Management buyout (MBO)

A management buyout is an increasingly effective exit strategy for business owners, as the ownership and the control of the business pass to the hands of a trusted management team.

For the management team, it represents a once in a lifetime chance to buy a share in a business that they know and understand, for a relatively small consideration.

Management buy ins (MBI)

A management buy in occurs when a manager or a management team from outside the company buys the business. An MBI is considered higher risk than an MBO, because the incoming management team will be less familiar with the workings of the business. To secure funding, an MBI team must have a credible strategy and be able to demonstrate their ability to deliver on it.

How our corporate advice can help your MBI succeed

We will help you find the acquisition target, where appropriate, and work with you as we would with an internal management team on an MBO.

Employee buyouts (EBO)

With an employee buyout, the business ownership passes to the employees. It can be a very effective succession strategy for owner managers, as it is highly motivating for the workforce and is less disruptive than a trade sale, with no confidential information disclosed to competitors.

Benefits of an EBO

• Your legacy stays intact – the possibility of losing it through a trade sale is avoided.
• No adversarial party to negotiate with.
• Loyal employees remain in gainful employment. They are able to influence how the business is managed and share in the future rewards of a successfully run business.
• Tax incentives make an EBO very attractive to both the exiting owners as well as the new employee-owners.

To realise the best outcome for your exit strategy, it’s vital to plan well ahead. Our specialist advice will help you identify the best exit option, prepare your business for the sale and help acquire the highest value deal with the right kind of buyer.

Get in touch to find out how we can help you with planning and implementing your exit.