Consider your exit strategy when starting up
The exit process
The process you will have to go through will depend on how you are exiting the business.
Selling the business
If you are selling the business there are several stages you will go through:
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grooming your business for sale
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valuing your business
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identifying and marketing your business to potential buyers
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negotiating with potential buyers
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completing legal due diligence
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finalising the sale and transferring ownership
Prior to the sale, you should get the business into shape by reducing overheads, debts and excess stock and getting your finances into good order. You will also require detailed financial information, including audited accounts and forecasts which you can prepare in advance. You can read specific information in our guide on preparing to sell your business.
You should seek specialist advice from your accountant, solicitor or corporate adviser. They will help you reach a realistic valuation, and identify and market your business to potential buyers. For further information see our guide on how to value and market your business.
For further information on completing the sales process, see our guide on how to complete the sale of your business.
Flotation
Businesses planning a flotation will go through a similar process and will require a detailed business plan, prospectus and accounts which comply with specific accounting standards. For further information on floating your company, see our guide on floating on a stock market: your options.
Closing the business
If you are simply closing the business, the process should be much simpler. You should contact the relevant authorities to advise them you are closing down and calculate and pay off any outstanding liabilities (such as VAT) and debts. See our guide on selling or closing your business - a tax overview.
If you have employed any workers you will also need to give them the proper notice and any outstanding pay and benefits. For further information on making employees redundant, see our guides on how to issue the correct periods of notice and on making an employee redundant.
Subjects covered in this guide
- Introduction
- Why you need an exit strategy
- What do you want from your business?
- Decisions that could affect your eventual exit
- Exit option: family succession
- Exit option: selling your business
- Exit option: float your business
- Exit option: close your business
- The exit process
- Here's how I planned an exit strategy
