Credit: Kroock74/Wikimedia

Five options for exiting your business

Sell, close or pass down to the kids? All have their pros and cons, says Jo Haigh.

by Jo Haigh
Last Updated: 28 Aug 2015

Few people starting their business think immediately about exit options. However, as a corporate financier, I would highly recommend having an exit plan from day one as it solidifies your aspirations for the business and makes sure you are always working towards that end goal.

Although the economy is picking up, it’s still early days and most entrepreneurs are likely to spend the early days of their business predominantly thinking of ways to survive and thrive, rather than focused on some ethereal exit plan. But sometimes circumstances can creep upon you, such as:

•         Age - most self-employed entrepreneurs don’t want to work to retirement age though there will inevitably be a number who will wish to die at the desk. What you need to consider is, is it this particular desk?

•         Illness - you can’t plan for it but you have to deal with it if it happens.

•         Boredom - oddly enough, this often comes with success.

•         Lack of skills - running a business becomes more challenging as it grows.

If one or more of these things happens, then when decision time comes the choices can seem limited and time becomes critical very quickly. Your options are limited and each have their own challenges and benefits. None are easy, so it is important to ask the right questions before the decision is made.


There are many questions you will have to consider if you decide to sell and each one brings with it its own challenges. The key ones are:

•         Who do you sell your business to: a competitor? A friend? Your management team, or a private equity investor?

•         What price would you be happy with? Think about this carefully as value and worth are never the same thing. By and large deals fail in terms, not on price.

•         When is the best time to sell for you and your business? Don’t rush to ‘jump ship’, but at the same time know when it is time to call it a day.

•         Will you be tied in and for how long? Can you work for the person who buys your business? Can you honestly say you will work as hard for them as you do for yourself?

•         Will the new buyer look after your business? You care about it, will they?


Choosing to close your business may seem like giving up, but could it be a viable option? The downside is that the goodwill value will be lost, there are staff implications and it costs money to wind up a company. The upsides include no (potentially) lengthy sales process and not having to watch as someone else takes over your life’s work.

Retire and put in a management team

Without a doubt, there are some brilliant people in the work place who are happy to stand up and be counted, to be 'the hired hand' and take over your mantle when you leave. The challenge is finding them, particularly for smaller businesses that can struggle to attract the necessary talent when up against larger, more financially attractive, firms. But if you can find a group of people who share your vision, have the drive and passion to push the business forward and will work as a team, then crack on.


Trust me, and I say this from experience, there is no such thing as a 'joint' venture. There is always a bigger player with more weight, greater numbers and deeper pockets. This option may give you a viable and potentially attractive exit opportunity, but it will need a very, very careful definition in the early days to ensure everything you have worked to build isn’t swallowed up and lost within the belly of the beast.

Pass it on to the family

This can work, but to make it a success and to ensure your family business remains just that, make sure your plans are aligned from the start. Often the transition into a family business is seen as a right rather that something earned and there is much to be said for the benefits of gaining essential life skills as well as business ones first. Make sure your heirs get experience outside your world before they come to your party.

As with most things in life, preparing for an exit makes sense - and the sooner the better. Not only does it give you a target to focus on while growing the business but when you do make the leap to sell, having options means your ability to negotiate is vastly improved. Last minute actions will inevitably mean less choice and less money.
Jo Haigh is CEO of FDS Director Services and the author of The Keys to the Boardroom - How to Get There and How to Stay There.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

The ignominious death of Gordon Gekko

Profit at all costs is a defunct philosophy, and purpose a corporate superpower, argues this...

Gender bias is kept alive by those who think it is dead

Research: Greater representation of women does not automatically lead to equal treatment.

What I learned leading a Syrian bank through a civil war

Louai Al Roumani was CFO of Syria's largest private retail bank when the conflict broke...

Martin Sorrell: “There’s something about the unfairness of it that drives me”

EXCLUSIVE: The agency juggernaut on bouncing back, what he would do with WPP and why...

The 10 values that will matter most after COVID-19

According to a survey of Management Today readers.

Why efficiency is holding you back

There is a trade-off between performance and reliability, but it doesn’t have to be zero-sum....