Are You Thinking of Exiting Your Business: What Are Your Options?
If you’re a business owner or managing director of an SME, there may come a time when you begin thinking seriously about exiting your business. Whether it’s to retire, pursue other ventures, or simply capitalise on the value you’ve built, planning a successful exit is one of the most important decisions you’ll ever make. But how to exit your business isn’t always straightforward.
This article explores the main business exit options available, how to prepare a robust exit plan, and why bringing in an independent Non-Executive Director (NED) and a Finance Director can help you maximise value and ensure a smooth transition.
Why Plan Your Exit Early?
Many business owners leave their exit too late or underestimate the complexity involved. Having a clear business exit plan can:
- Maximise the value of your business
- Make your company more attractive to buyers or successors
- Reduce risk and uncertainty
- Provide clarity for employees, customers, and stakeholders
- Give you time to address any gaps in management, systems, or financial reporting
Ideally, you should start planning your business exit at least 2–3 years before you want to step away. This allows time to improve performance, demonstrate consistent results, and ensure continuity.
What Are Your Business Exit Options?
There’s no one-size-fits-all approach to exiting your business. Your choice depends on your goals, the nature of your business, market conditions, and whether you want a clean break or ongoing involvement.
Here are seven common ways to exit a business:
1. Trade Sale
Selling to another company, often a competitor or a business looking to enter your market, is a popular option. A trade sale can generate significant value, especially if your business has a unique proposition, strong recurring revenues, or intellectual property.
Pros: Potential for high valuation, clean break
Cons: Due diligence can be intense; cultural fit issues with buyer
2. Management Buy-Out (MBO)
In an MBO, your existing management team buys the business, often using external finance.
Pros: Continuity for employees and clients, smoother transition
Cons: May require seller financing or external funding; may not achieve the highest price
3. Management Buy-In (MBI)
In an MBI, an external management team acquires the business, usually backed by private investors or funding partners. This option is attractive if your internal team isn’t ready to take over or lacks the means to fund a buyout.
Pros: Brings in fresh leadership and capital, potential for strong growth
Cons: Higher risk of disruption if new team lacks sector knowledge; more complex due diligence
4. Employee Ownership Trust (EOT)
Selling to an EOT allows your employees to take ownership via a trust, with generous tax reliefs for the owner.
Pros: Tax-efficient, protects company culture, gradual exit possible
Cons: Usually lower valuations than trade sales; only suitable in certain circumstances
5. Family Succession
Passing the business on to a family member is a traditional route for some owners.
Pros: Legacy preserved, continuity
Cons: Family dynamics can complicate decisions; successor may lack experience
6. Initial Public Offering (IPO)
Going public is a route for larger SMEs with significant growth potential.
Pros: Access to capital, higher profile
Cons: Expensive, time-consuming, not suitable for most SMEs
7. Wind-Down and Liquidation
If no buyer or successor is available, winding down the business may be the last resort.
Pros: Simplicity
Cons: Often yields the least value; can affect your reputation
Creating a Business Exit Plan
Whichever route you choose, a well-thought-out exit plan is essential. This should include:
- Your desired timeline and financial goals
- Business valuation and key value drivers
- Target buyer profile (if selling)
- Succession planning
- Operational readiness
- Legal and tax considerations
- Communication strategy
For best results, the exit plan should be implemented over a period of at least 2-3 years but preferably more. This allows enough time particularly for the organisational structure to be developed such that the business no longer relies on the owner, and the new management team are properly prepared. This is where involving an independent external perspective can be transformational.
The Role of an Independent Non-Executive Director
An independent Non-Executive Director (NED) plays an important role in any business in any stage of its life cycle, but an especially critical role in preparing for a successful exit. Unlike executive directors, Non-Execs are not involved in daily operations. Their value lies in their experience, independence, objectivitiy and strategic perspective.
An NED can help you:
- Challenge assumptions and clarify your exit objectives
- Strengthen governance and improve decision-making
- Identify strategic opportunities and risks
- Prepare the business for due diligence and external scrutiny
- Align the board and senior team around the exit plan
Having an NED in place sends a positive signal to potential buyers or investors. It shows that your business has mature governance structures and is less reliant on the founder. This builds buyer confidence and supports building value in your business.
The Value of a Fractional Finance Director
A Finance Director (FD) is another key figure in a successful exit. They provide high-level financial insight on a part-time or project basis—ideal for SMEs that don’t need or can’t justify a full-time FD.
A Finance Director helps you:
- Understand and improve key financial metrics
- Prepare reliable, investor-ready financial reports
- Implement forecasts and cash flow models
- Conduct valuations and scenario planning
- Support due diligence and negotiations
Together, an NED and an FD create a powerful team. They bring objectivity, expertise, and challenge—qualities that are often difficult to achieve internally. They also help you stay focused on day-to-day performance while progressing toward your exit goals.
Building Value in Your Business Before Exit
To maximise your outcome, focus on building value in your business well before exiting. This involves:
- Reducing reliance on the owner
- Improving recurring revenues and customer retention
- Strengthening your management team
- Demonstrating consistent growth in profitability
- Tightening financial controls and reporting
- Creating a scalable, systemised operation
Buyers want a business that is robust, transferable, and capable of future growth. The stronger your foundation, the better your business exit options will be.
Final Thoughts: Don’t Go It Alone
Exiting your business is arguably the most important moment in your business life. It deserves time, planning, and the right support. Whether you're considering a sale, succession, or employee ownership, your exit plan will determine how smooth and successful the process is.
Working with an independent Non-Executive Director and a Finance Director can bring strategic clarity, financial rigour, and objective challenge. They’ll help you make informed decisions, avoid common pitfalls, and ultimately realise the true value of what you’ve built.
If you're starting to think about how to exit your business, now is the time to get your team in place. A well-prepared exit isn’t just about leaving — it’s about finishing well
Looking to start your exit journey?
Talk to us about how a Non-Executive Director and a Finance Director can support your next chapter. Secantor specialises in preparing businesses for exit. Our team members are carefully selected so they can each cover both NED and FD roles meaning you get the value of both for the cost of one.
We pride ourselves on providing only the most effective NEDs & FDs who are commercially focussed and widely experienced across many sectors and business types. This makes them very adaptable to different management styles, cultures and personalities. Our NEDs and FDs have helped improve hundreds of businesses over the years, including this case study which describes how Secantor helped one couple to save their business, grow it and finally sell it for a substantial sum.
We are confident that we have a non executive director in our team that will fit your culture and help you fulfil your business potential.
Why not book a video call with one of our experts to find out how your business could benefit?