Thinking of getting out? Make your exit strategy count

Let’s face it, the new Chancellor has business owners well and truly spooked. 

Like a Halloween horror film, we’re peering out from behind the sofa to catch a glimpse of the Capital Gains Tax monster which is yet to be fully revealed in the budget on 30th October!

Halloween jokes aside, over the past couple of months The Numbers Studio has had a ridiculous number of conversations with business owners, prompted by looming tax changes, who are questioning whether they should sell their businesses – and more crucially how they even go about doing so.

How to decide if now is the right time

Timing is everything when it comes to selling your business. Here’s what to consider if you’re a business owner thinking about making your move:

1. Know your market: Is there growing demand for businesses like yours in the local area? Are buyers actively seeking opportunities? If the market is strong and stable, it could be the ideal moment to sell.

2. What’s your goal? Are you looking to retire, start a new venture, or simply move on to a new phase in life? Knowing what you want from this sale will guide your decision and help you plan for your next steps.

3. Valuation: It’s easy to get emotionally attached to your business, but understanding its current true market value is crucial. A professional valuation can help you set a fair price that attracts serious buyers.

4. Seasonality and local economics: If your industry is on the upswing or local economic conditions are favourable, selling during a peak in demand can boost your business’s value.

What to expect during the selling process

Selling a business isn’t just about handing over the keys; it’s a journey that requires careful planning. Here’s what you can expect:

1. Get prepared: Organise your financial records, legal documents and relevant records to present a clear picture to potential buyers. The more prepared and transparent you are, the smoother the process.

2. Find your buyer: Target the right buyers and present your business as a solution to their needs. You could develop a marketing strategy but your best buyers are probably already in your LinkedIn network. Specialist brokers can also help with this.

3. Agree heads of terms: This is where the initial terms of the deal come together. This is just the start of the process, like having an offer accepted on a house. There are many things which could cause the deal to abort, most of which will come to light during due diligence.

4. Due diligence: Buyers will deep dive into your business details during this phase, checking for any red flags and reasons to reduce the purchase price or walk away. Be prepared to answer questions about profitability, customer base, and growth potential with full transparency.

5. Final negotiations: After due diligence, this is when either party might look to negotiate on the purchase price or change the terms of the deal.  Before you engage in these negotiations, make sure you know what you want…don’t be afraid to walk away still.

6. Sale & Purchase Agreement (SPA): This is the main contract which will cover all aspects of the deal. Using a quality commercial lawyer is essential.

7. Signing the contract: This is the final step, where all parties sign on the dotted line, officially transferring ownership. Pop those champagne corks and start planning for the future!

Life after selling: what comes next?

Once the deal is done, what’s next for you? Here’s how to handle the transition after selling your business:

1. Filling the void: Whether it’s a new venture, investing your time in hobbies, or mentoring others, having a plan helps fill the void left by selling your business.

2. Smart financial planning: With the proceeds from the sale, it’s crucial to plan your finances wisely. Consider using a good financial advisor to help with investing, saving for retirement, or exploring new opportunities that align with your future goals.

3. Stay connected: Staying active in the local business community through networking or investments can help maintain your sense of purpose even after the sale.

Looking to sell your business? How The Numbers Studio can help

At The Numbers Studio, we understand that buying or selling a business is a huge decision that can shape your future. Our mission is to empower entrepreneurs to create a more fulfilling future for themselves, so whether you’re planning your exit or exploring new business opportunities, we’re here to guide you every step of the way.

For more information about how The Numbers Studio can help you through every step of your buying or selling journey, visit their website at www.numbers.studio. You can also contact them at 01273 973 741 or hello@numbersstudio.com