How to effectively plan your exit strategy

By DTE Business Advisers

31 Jan 2023

By outlining the options available, why, and when to plan, this blog post by Ben Fallows will equip you with the knowledge to create an effective exit strategy.

WHAT IS AN EXIT STRATEGY?

An Exit Strategy relates to a strategic plan outlining the means by which the owner(s) of a business can reduce or dispose of their stake in that company.

Amongst other considerations, this plan should cover:

  • When to exit.
  • How to exit.
  • What the legacy might look like.
  • Is the future of the business secure?
  • Who might be the best potential buyers?
  • How to achieve maximum value

There are a number of options available to business owners. Choosing the most appropriate strategy will depend on:

  • The nature of the business and the sector in which it operates.
  • The financial performance of the business.
  • The dynamics of the ownership and leadership teams.
  • Overall economic climate.
  • The availability of finance.

WHAT ARE THE OPTIONS AVAILABLE TO YOU?

Whilst not exhaustive, some of the options available include:

  • Sale of the business to a third party – either a trade buyer or financial investor. This is a common option for SMEs.
  • Sale of the business to employees (Management Buy-Out).
  • Sale of the business to a family member(s).
  • Employee ownership – selling or gifting shares in the business to an employee-owned trust.
  • Initial Public Offering – offering shares to the public via a listing of the business on a stock exchange. This option is less common for SMEs.

WHY CREATE AN EXIT STRATEGY?

Having a well-defined exit strategy can be beneficial to business owners and other stakeholders such as lenders and/or investors for many reasons. This includes, but is not limited to:

  • Maximising shareholder value.
  • Personal tax planning.
  • Providing control over when to exit.
  • Securing the future for the business.
  • Incentivising and retaining top talent and employees.
  • Making sure legal and due diligence considerations are addressed (these can impact value).
  • Reducing the time to exit.

WHEN SHOULD YOU CONSIDER AN EXIT STRATEGY?

It is never too early to begin planning your exit strategy. Although it may seem unusual to pre-empt your departure, we would usually recommend formulating your exit strategy at least 12-24 months prior to beginning the exit process. This ensures that the business is prepared for sale and there is a focus on the areas which are likely to be key value drivers for buyers. A trade disposal process can typically take anywhere from 6 months to a year.

 

START PLANNING YOUR EXIT STRATEGY NOW

At DTE Corporate Finance we have extensive experience in formulating and executing exit strategies. Our team has acted on many transactions in a variety of sectors and at a large range of valuations.

Whilst every transaction is unique, our experience of completing transactions over the years means we have the expertise required to work with you on developing an exit strategy. This is tailored specifically to you and your business requirements.

To learn more about how we can help, our corporate finance team are offering a shareholder review session. If this is of interest to you, please get in touch.

We also work closely with our tax team to prepare tax-efficient strategies for business owners and maximise realisations.

If you are interested in discussing which options may be available to you, either now or in the future, please contact us on 0161 819 1910 or [email protected].

Latest news

1

CMAC Group appoints Matthew Ratcliffe as chief operating officer Matthew Ratcliffe CMAC

CMAC Group appoints Matthew Ratcliffe as chief operating officer

03 Apr 2025

2

For sale signs at The Villa Villa Wrea Green has been brought to market (Image credit: The Villa Wrea Green)

For sale signs at The Villa

02 Apr 2025

3

Montane group expands with new Lancashire hub Anthony Rae Scott Murcott And Adam Lee

Montane group expands with new Lancashire hub

02 Apr 2025

4

Trio of wins for Lancaster brand and digital consultancy Tom Grattan MD and Daniel Wallace

Trio of wins for Lancaster brand and digital consultancy

02 Apr 2025

5

College excellence highlighted in Ofsted report Fazal Dad

College excellence highlighted in Ofsted report

02 Apr 2025

Pc Prestonmacan Gif980x120 March
Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
Lancashire Net Zero Carbon Conference
Net Zero Carbon Social 1200px
Networking
18 Jun 2025

Lancashire Net Zero Carbon Conference

Crow Wood Hotel & Spa Resort, Burnley, BB12 0RT

08:30 - 13:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

RISE - The Academy for Female Leaders and Managers
WENDY BOWERS RISE Illustrstion copy.jpg.jpg
LBV Hub Seminars
02 Apr 2025 - 08 Oct 2025

RISE - The Academy for Female Leaders and Managers

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:00 - 15:30

WHN Charity Quiz Night
Evenbrite Quiz 2025.png.png
LBV Hub Fundraisers
03 Apr 2025 - 03 Apr 2025

WHN Charity Quiz Night

The Stables Country Club, Bury , BL9 1PU

18:00 - 22:00

Chamber Breakfast Networking – April
Chamber logo - new-02.png.png
LBV Hub Networking
03 Apr 2025 - 03 Apr 2025

Chamber Breakfast Networking – April

The Dukes Theatre, Lancaster, LA1 1QE

08:00 - 10:00

Lancashire Business Expo 2025
https---cdn.evbuc.com-images-880395853-4862066883-1-original.20241022-091152-2.jpeg.jpg
LBV Hub Exhibitions
04 Apr 2025 - 04 Apr 2025

Lancashire Business Expo 2025

Sir Tom Finney Sports Centre, Preston, PR1 2HE

09:00 - 15:00

The Business Network Central & East Lancashire
LBV Hub Networking
24 Apr 2025 - 24 Apr 2025

The Business Network Central & East Lancashire

Stanley House, Blackburn, BB2 7NP

11:30 - 14:15

People Power: Exclusive Event Series
Stay ahead in 2025.jpg.jpg
LBV Hub Seminars
29 Apr 2025 - 29 Apr 2025

People Power: Exclusive Event Series

People's History Museum, Manchester, M3 3ER

17:00 - 21:00

Planning for the future + navigating Inheritance Tax changes
Planning for the future + navigating Inheritance Tax changes for website.png.png
LBV Hub Seminars
01 May 2025 - 01 May 2025

Planning for the future + navigating Inheritance Tax changes

Stanley House Hotel, Mellor, Blackburn, BB2 7NP, Blackburn, BB2 7NP

08:00 - 10:30

A night at the races
1.png.png
LBV Hub Dinners / Balls
02 May 2025 - 02 May 2025

A night at the races

Morecambe FC, Morecambe, LA4 4TB

19:00 - 23:59

Amber River True Bearing quarterly investment seminar
LBV Hub Seminars
22 May 2025 - 22 May 2025

Amber River True Bearing quarterly investment seminar

Cottons Hotel & Spa , Knutsford, WA16 0SU

16:00 - 18:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more Lbv121 Online Graphic
Subscribe now

Weekly news bulletin