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  • Zach Dogar

10 Important Questions you should ask about your Exit Strategy

Updated: Feb 1, 2020


Business Owners have rarely considered when and how they will exit their business. Circumstances often dictate when they decide to sell leading to money being left on the table, stress and all the other symptoms of being ill-prepared.

“Business owners are selling an extremely valuable asset but unfortunately, they have little or no experience of selling a business. They don’t really understand the process and how to put themselves in the strongest position to get the best deal. The net result is that the eventual sale price, if there is one, is up to 20-30% LESS than the market price.”

You should start thinking about your exit strategy as early as possible, years before you take action to actually sell. With deals now involving an Owner sometimes having to stay on in the business for up to 5 years, having an exit strategy in mind this is a key consideration and a plan needs to be put in place.

exit strategy

The following 10 questions will help you plan ahead and make the best of all the hard work and investment you have put into building your business.

1. When should I sell? Timing is a key influencer and both personal and strategic factors need to be considered.

You should always be looking to exit your investment; not because your business is in a good or bad place but because it is a smart business decision. Having an exit strategy in mind will make you more prepared and flexible for those inevitable changes in your life.

2. What is the realistic target value I would like to achieve? Understanding what you want to achieve will help you formulate a plan. Work with your accountant to put some numbers together and establish your likely cash flow for the next 3-5 years.

3. What is my business realistically worth now?

You need to understand where you are, so you can plot where you want to be. Consult a good business broker who can advise you on a realistic value of your business.

4. How can I improve the value of my business? How can I add value to my business? Book your free 1 hour telephone consultation to help you identify areas where you can add value to your business.

5. What type of deal am I open to and likely to achieve? You need to carefully consider what you are likely to be offered, and whether an outright sale or an earn-out is better suited to your needs.

6. What is the most tax efficient deal for me when I do sell? You need to work with a good business broker and accountant to work out the most tax efficient way of selling your business.

“what’s more important than the deal size is the net amount the deal is worth to you”

7. Who is going to buy my business and what strategic reasons might they have to acquire me? It is very important to understand your target market when selling your company as there are different types of buyers with different motives.

selling a business decision

8. How am I going to sell my business and how does it work? How can I maintain confidentiality?

When a business is placed on the market, it sometimes becomes vulnerable as competitors, clients and staff finding out creates uncertainty and can affect its future. It’s important to understand the journey ahead and what exactly is involved. Our free will give you a good starting point

“When a business is placed on the market, it sometimes becomes vulnerable as competitors, clients and staff finding out creates uncertainty and can affect its future.”

9. Who am I going to work with to ready my business for sale, and to sell my business? You will probably have an accountant and solicitor in place, but you need a good broker to co-ordinate the whole process for you from planning to execution. There are different options available to you but be sure to hire a reputable broker that is paid on results and who’s motives align with yours. Choosing a good business broker is a tough call, but the following considerations may help you.

10. Have you done a SWOT analysis? This is a useful tool to help with strategic planning. Many free templates are available, or we can prepare one for you as part of our free exit strategy planning service.

A SWOT analysis is “a study undertaken by an organisation to identify its internal strengths and weaknesses, as well as its external opportunities and threats.”

We hope these tips will encourage you to put into place an effective exit strategy so that you can maximise the sale of one of the largest assets you will sell in your lifetime.

The author of this post Zach Dogar has over 20 years’ experience as a business broker and has helped hundreds of business owners sell their business. Book your free consultation today to help formulate your exit strategy.

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