What do you want from your business?
What and how much do you want for your business
Before you think about the commercial factors that will determine how you will exit your business, it's worth considering more personal matters. Your reasons for starting a business and the type of business you set up will help determine your exit options.
Your objectives when starting a business might include:
- being your own boss and drawing a salary and some kind of pension
- creating a business to pass on to family members
- generating capital growth and making money by selling the business
- creating an invention or piece of intellectual property, developing it and selling the business quickly
A hairdressing business may fulfil the first objective. But whether you can sell it as a going concern might depend on whether you've stopped being chief stylist and have moved into a managing role.
If you're no longer styling you may more easily sell on your salon, its customers, goodwill, and regular cashflow. If most customers still want you to cut their hair, you'll find it more difficult to sell the business as it will be harder for potential buyers to differentiate the business from you.
Consultancies often face the same difficulty, as they often depend on an individual's skills or contacts. And if you're a great inventor but don't plan to add to your research and development (R&D) team, you'd do best to concentrate on making money from your patents.
If you're starting a business to make money through capital growth, your exit options may be wider. If you build a high-growth business in a thriving sector you may be able to realise the value in your business through a sale to trade buyers, a merger or even a stockmarket flotation.
Other options may also be available to businesses coming out of a controlled environment with an established reputation - such as a business-incubator enterprise or spin-outs from companies or universities.
