Exit Scenarios For Business Owners

Here at Burgh Thorpe Solicitors in Peterborough we know how hard business owners’ work. They tirelessly work to build the business and gain new clients. The brand reputation is constantly being worked on and improved, and the business is being made to be as good as it possibly can be. But what is the exit strategy? Business owners don’t live forever, and many don’t want to work forever. Very often the exit scenarios don’t cross a business owners mind until they’re ready to exit. But is that too late?

Putting an exit strategy in place before you are ready to exit your business is highly recommended. This means that the business can be prepared and gain better value. Nothing will be missed, and all changes can be made to improve the business for sale in the years up to the exit. An exit strategy can be put in place to ensure that the best exit scenario is in place for the business and the business owner.

Our corporate lawyers have helped many business owners create their exit strategies. In this blog post we share the most common exit scenarios. These are exit scenarios that we have helped business owners complete for their own organisations.

One exit scenario is voluntarily. This is where the business chooses to sell their shares to existing shareholders, new investors or back into the company itself.

There is also the involuntary exit scenario. This is where the business owner dies, becomes seriously ill or disabled and can no longer work. An involuntary exit scenario may also be brought in when there is a bankruptcy in the business or a breach of an agreement.

Another exit strategy is the buy-back of shares. This is where a company can buy back shares from a shareholder that is departing the business. This is usually used on retained earning or through debt financing. It can often provide a way for the remaining shareholders to stay in control.

A third-party sale or acquisition is another popular exit strategy for business owners. In larger transactions a shareholder may sell their shares to an outside investor. This will be done during a full company acquisition. It normally requires extensive due diligence and valuation review.

Here at Burgh Thorpe Solicitors, our corporate solicitors believe that one of the main aspects of a corporate transaction is the due-diligence process. This is the case for both buyers and sellers within corporate transactions. A strong due diligence process puts a business under a microscope. This enables both parties to clearly see what is being sold, clearly.

Planning an exit strategy for your business, or looking to buy a business? Call our professional corporate lawyers in Peterborough now to see how we can help you with your due diligence and exit scenario planning.