In this article we will share how to successfully exit your business with the 2 year exit plan.
Retirement, change of pace, new challenges – these are all common reasons for an owner to decide it’s time to exit their business. But these are not usually snap decisions. They will be niggling thoughts, middle-of-the-night deliberations, often mulled over for years. The reality is that whichever exit route is chosen, the process generally takes around 2 years to complete. (2 years is the average from our experience, but there are exceptions. The timing very much depends on external factors such as the market position and personal objectives of the owner).
From many years of experience supporting business owners through exits we have created the ultimate exit plan timeline. We believe that in an ideal scenario, a business owner should start the exit planning process 2 years prior to their intended sale date. This allows time to explore the options, prepare the business and be able to make key life-changing decisions without feeling rushed.
Business Exit Timeline
Step 1: Business Exit Review: 3-6 months
You’ll no doubt have questions swirling in your mind, so we’ll start by helping to answer the following:
- Should I sell my business?
- How is a buyer going to value my business?
- What are the different routes I can take?
- Is the timing and market right?
- What’s happening in my sector?
- How long will it take to sell?
- How does the process work?
- Who could the buyers be?
- Would I consider alternatives to an outright sale?
- Can I cope with the changes on the horizon?
- Would I be willing to stay on if the buyer wants me to?
- Can my business thrive without me or without a key customer?
- Do I have a strong management team?
- What are the potential deal breakers?
- Do I need to find legal, personal wealth, tax, and other professional support?
- How much is it likely to all cost?
Step 2: Exit Strategy: 6 months
- Assessment of the business exit review outputs
- Agreement on the preferred exit option
- Legal and financial review
- Business changes to improve value/demand
Step 3: Exit Preparation: 3 months
- Build a list of buyers
- Construct marketing documentation
- Detailed financial analysis
Step 4: Exit Launch: 6 months
- Marketing the business to potential buyers
- Initial conversations with interested buyers
- Negotiation of indicative offers
Step 5: Due Diligence & Completion: 3 months
- Engage in the due diligence process with chosen buyer
- Negotiation of the Sales & Purchase Agreement
- Complete the deal
How to start the 2 year exit plan
Whether you’re in the early stages of considering an exit or have already embarked on the journey, talking to a specialist advisor can help you fully prepare and take advantage of the best opportunities. Contact Partners Mark Crossfield (07780 957631) or Geoff Pinder (07717 874357) for a confidential discussion and find out how they can support your exit strategy.