The Vegan Business Tribe Podcast Episode 118: How to exit a business

There are more ways to exit a business than you might think. For some, exiting a business might be a negative experience. Maybe you’ve reached burnout or the market has changed and you don’t have the energy to change with it. But for others, getting acquired by a larger competitor or selling your business for a large amount of money might actually be your long-term business goal.

In this episode, David looks at all the different options for exiting your business from selling to succession, or even just winding it up in a positive way. And if your goal IS to sell, then we also look at what you need to do to create a business that has value without you in the middle of it and which can continue to run once you’ve left.

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Key take-aways from this episode:

  1. When you come to exit a business, usually people think you have one of two options: you sell it or you just shut it down. When in reality, there’s lots of choices between those two extremes.

  2. Most small businesses are not really worth anything without their founder. So if your goal is to sell your business then you need to start working to build what we call ‘intrinsic value’. And that might be: tangible assets such as property and equipment; your order book and ongoing contracts with customers; your brand; or your IP or intellectual copyright.

  3. Selling a business can turn out to be a really long process, think years rather than months. There’s a lot of work to do to get a business to the point where it’s saleable and a LOT of documentation to provide to potential buyers – and the deal might include you staying on for 12 to 24 months after the sale.

  4. There are other options to a sale. You can hand a business over to someone else but agree to still continue to take a wage or dividends from it instead of taking an up-front payment. Or you can look at a management-buyout or creating some kind of co-operative structure, where the company buys back your shares either with cash in the bank or by the management taking out a loan.

  5. If your business isn’t valuable as a going concern, then it’s individual parts might still have value when you liquidate them. For example, your outstanding stock, your customer base and debtor’s list, or even your web address and social media following all might have value to the right person or company.

  6. If you do decide to close down the business then embrace it and use the extra spike in publicity to promote what you are doing next or that you are open for work.

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