When you first set out in business, it is unusual to be clear on your preferred exit route, or the succession path, though it would often be hugely beneficial. It’s more usually over time that the thought of exit occurs and the route becomes clear.
We can help with the process of clarifying the exit route and the succession plan and facilitate the discussions necessary for all parties to come to a shared and equitable conclusion.
There are many options for exit, amongst them:
• Transition, perhaps to a younger generation or suitable staff
Each has a unique set of considerations which can range from training and development to the gradual ‘easing out’ of the older generation, an extremely sensitive subject for all involved.
If the decision is to go for sale, it can be worth taking time before going to the market to ensure the business is in the most appealing situation to maximise the sale price.
This does not necessarily mean it will be generating the most cash, as there are many other factors that can affect the final sale value, It could be to ensure the processes and incumbent staff are able to run the business in the same way without the owners in place.
Where there is no obvious successor, it can be an interesting process to consider who within the business could take over and to look at the enhancements in terms of skill sets and training that may be needed for them to do so. This route can often be the most beneficial way and cause the least upheaval within the business; it is a route we have taken in the past. With our first business, taking over at the point of the Principal’s retirement resulted in a very smooth transition and little change to the client base other than a new logo. This is particularly appealing if service levels and the day to day contacts that customers will deal with remain consistent.
The most common decision is to maintain a balance between more than one option, and slowly identify the preferred route; we can help maintain this balance whilst a potential successor or purchaser can be found, and a decision as to the preferred option crystallises. We’ve helped a number of long standing clients through the process, dealing with the subsequent sale process as necessary.
We also have first-hand experience of the process of purchase and sale, so appreciate how it feels to be on the other side of the fence!
If you’re unsure of your preferred exit route and would like to discuss how the various options may affect your plans for the future, please contact us for an initial discussion.
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