If you’re like most businesspeople, you won’t want to be running your company forever. Being an entrepreneur is fun but it drains you of time, emotion, and energy and it doesn’t get any easier as you get older, despite the experience you’ve gained along the way.

In this article, we’ll look at the two main routes of disposal – selling it (and variations thereon) and passing it to your family.

Selling your business – putting your company on the market

Once you’ve made the decision to put your company on the market, you’ll need to start dealing with an accountant to get your business’s affairs in order.

You may need to engage with a business transfer agent to take you to market and, if there is interest which leads to an offer, you’ll also need to work with an experienced commercial solicitor to act on your behalf at the negotiations and to the point of completion.

The process of selling your business can take up to 18 months and it will require a substantial time and financial commitment from you along the way. You may end up not selling your company at all.

You are most likely to be bought by a competitor (a “trade sale”) or a supplier who sees synergy between your company and theirs. Trade sales will likely attract the lowest bids unless you and your business broker can sell to a bidder a compelling and overriding reason why your company under their ownership is a lucrative option.

Selling your business – management buy out

You may wish to invite your management team to buy you out, particularly if your business is heavily dependent on its existing management remaining in situ.

There are companies which fund management buy outs however each member of the management buy out team will be expected to front at least one year’s salary.

Selling your business – mergers

Another option to sell your business would be merge your business with another.

This will not release all the cash that you might receive from an outright sale however you can ask your merging partner (particularly if they are bigger than you) to reduce your shareholding in the combined company in exchange for a cash payment.

Passing your business onto the family

Many family firms are passed down with each new generation bringing a fresh perspective and skillset to the business.

Even if you don’t want to, you will still be involved in the business is some way, either advising the family members now in charge or even contributing labour and management time when needed.

You and your family members can, in conjunction with Burton Beavan, device a structure where you would still receive wages and dividends from the business.

If this is your preferred route, please do approach us for advice as the method of transfer from one generation to the next depends on the structure of your company.

Get in touch with Burton Beavan

If you’re actively considering your future with the business, talk to the Burton Beavan team for confidential advice based upon years of experience helping clients with their exit strategies. Please contact Burton Beavan on 01606 333 900 or email us at hello@burtonbeavan.co.uk.