Exiting a business is a major milestone for any entrepreneur or small business owner. Whether your goal is to sell, pass the business to family, or wind up operations, proper planning is essential to ensure you maximise value, create a smooth transition, and achieve your personal objectives. 

This guide compiles the latest research, expert insights, and step-by-step frameworks to help you confidently prepare for your business exit.

Why planning your Business Exit matters

• Almost half (48%) of entrepreneurs have no exit strategy despite planning to leave their business in the future, exposing themselves to suboptimal outcomes or rushed decisions.
• Proactive planning helps set business objectives, attracts potential investors, and increases your business’s valuation when the time comes to exit.
• Unplanned exits, whether triggered by health, economic changes, or personal reasons, often result in reduced value or limited options. 

Common Business Exit Strategies

Exit Strategy	Description	Pros/Cons
Trade Sale	Sell business to another company or industry player.	May achieve best value / Process can be lengthy.
Private Equity / Venture Sale	Sell to financial investors who may grow and resell later.	Can command high multiples, but often require growth.
Management Buyout (MBO)	Existing managers / staff purchase all or part of the company.	Business continuity /  may be harder to finance.
Family Succession	Transfer ownership to a family member.	Maintains legacy / potential for family conflict.
Employee Ownership Trust (EOT)	Staff buy the business, becoming collective owners.	Motivates workforce /  works well for steady companies.
Initial Public Offering (IPO)	Float the company on the stock market.	Lucrative, but costly and complex, and beyond most small businesses.
Liquidation or Bankruptcy	Close the business, sell assets, pay off creditors.	For distressed exits / usually not value-maximising.

Key Statistics on Business Exits

• 29% of UK business owners have accelerated their exit strategies in recent months due to uncertainty around capital gains tax and succession reliefs.
• Only 50% of owners have a detailed succession plan, and one-third don’t know what will happen to their business upon exit.
• Half of UK business owners don’t have any exit strategy in place, and over 13% have never considered it at all.
• Business sales typically take 12 to 36 months depending on readiness and market conditions; starting planning at least 3-5 years ahead is recommended.

Step-by-Step Preparation Framework

1. Define Your Exit Goals

• Personal and Financial Objectives: What do you want personally and financially from the exit? Retirement? New ventures? Family succession?
• Future Involvement: Do you want to stay involved as a consultant, or are you seeking a clean break?
• Legacy Considerations: What do you want your business to stand for after you leave?

2. Assess Your Business’s Value

• Get a professional valuation, review financial performance, check assets and liabilities, and benchmark your business within the market.
• Identify and boost value drivers: consistent profits, diversified client base, strong brand, proprietary assets, recurring revenue.

3. Prepare Documentation and Due Diligence

• Organise Legal & Financial Records: This would include up-to-date financial information, share certificates, contracts, HR records, policies, tax returns.
• Resolve any outstanding disputes, IP issues, or compliance matters.
• Prepare for the ‘due diligence’ process; potential buyers will, rightly, want to scrutinise all aspects of your business.

4. Strengthen Your Business for Transition

• Reduce Reliance on Key Individuals: Train up your management team to operate independently and ideally remove yourself from the day to day entirely.
• Streamline operations and document processes.
• Build out contracts and diversify revenue streams where possible.

5. Explore and Choose Your Exit Strategy

• Consider trade sales, management buyouts, private equity, IPO, family succession, EOTs, or—in the case of distress—liquidation or bankruptcy. In the case of a planned sale, identify your target buyer.
• Get advice from trusted advisors: financial, legal, tax, and industry professionals. Financial advisors, accountants, and lawyers are typically most trusted for exit planning.

6. Plan and Execute the Transition

• Develop a clear timeline (6-36 months), identify key milestones, and communicate plans to stakeholders discreetly and effectively.
• Address post-exit life: restrictive covenants, non-compete clauses, your own next steps.
• Reward yourself and stay connected—exiting can be emotionally significant as well as financial.

Business Exit Checklist

• Define personal, professional, and legacy goals.
• Obtain a current business valuation—repeat regularly as preparation continues.
• Organise and update all financial, legal, HR, and contractual documents.
• Assess management team readiness and reduce owner dependency.
• Analyse and select the most suitable exit option(s).
• Build an advisory team of legal, financial, and tax experts.
• Pinpoint value drivers and address weaknesses.
• Prepare and rehearse for buyer due diligence.
• Set a realistic timeline and assign responsibilities for tasks.
• Communicate strategically with staff, suppliers, clients, and partners.

Contemporary Challenges and Opportunities

• Economic uncertainty and tax policy changes are driving more owners to consider exit earlier than planned.
• There are record levels of critical financial distress: over 47,000 UK businesses classified themselves as being ‘on the edge of collapse’ at the start of 2024, and that position has worsened since.
• Market conditions shift quickly, so maintaining flexibility in your exit strategy is key.

Final Thoughts…

Early and structured planning is the very best way to maximise the value of your business, to minimise risk, and ensure your personal and professional goals are met. Even if an exit seems a long way into the future, begin preparing today. It will enable you to future-proof the pay-back for your hard work in building your business and give yourself every opportunity for the best outcome.

We’ve been through the process ourselves, having built and exited our first business, and have taken many clients through the process over the years, so are in a really good position to help. Please get in touch if you’d like to chat through your options, even if you’re just in the earliest stages.

We also have a Business Exit Planning Workbook which will take you through the above in more detail. If you’d like a copy, you can download that here.