Planning your business exit strategy is a major step in ensuring a smooth and profitable transition when the time comes to sell or pass on your business. Whether you're looking to retire, pursue new opportunities or simply move on, a well-thought-out exit strategy can make all the difference.

All founders have to deal with the idea of leaving a business at some point but roughly 66% of business owners don’t have an exit plan in place. If you leave planning your exit strategy until you’re ready to leave, you’ve left it too late! Early preparation is the key to a successful exit.

What is the best business exit strategy?

M&A (mergers and acquisitions) is a popular exit route that is well-suited to many business goals, particularly for startups.

Pros of M&A deals

• You will set your own terms for sale and have full control over price negotiations.

• A buyer is likely to have an immediate need for your product or service.

• Multiple buyers might bid against one other, boosting the value of your business.

• The M&A market is remaining resilient despite the global economic downturn – more on this below.

There are other (less common) business exit strategies to consider including management buyouts, initial public offering (IPO), and acquihires.

Whether you’re a budding entrepreneur or an experienced CEO, you need to consider your business exit options carefully.

Suggested reading: Business Exits: Choosing the right strategy

Has M&A been impacted by the recession?

The global recession has caused a significant and prolonged downturn in economic activity and most industries and sectors have taken a hard hit. But what about M&A?

Good news, the M&A market has so far defied gravity and thrived despite the economic crisis. According to McKinsey, the value of large deals increased 67% for the year, peaking at $5.9 trillion – up 37% from 2020.

M&A has had a record-breaking year and shows no signs of slowing down, making it the perfect business exit strategy for most founders.

When should I start planning my exit strategy?

Planning an exit strategy might be the last thing on your mind when you’re busy running and growing a startup – we get it. But the last thing you want is to miss out on an incredible deal because of poor planning!

Planning an exit strategy takes time and the earlier you start, the safer and smoother the process will be. Get your business acquisition ready from day one and you’ll be ready when opportunities arise.

5 tips to plan an effective business exit strategy

1. Choose the best time to sell: Deciding when to sell your business is one of the biggest decisions you’ll make and you must get it right. You should consider things like industry trends, market demand, and why you want to sell.

2. Speak to an M&A advisor: Speaking to an M&A advisor early on will help you understand the acquisition market and process. Browsing an M&A advisor directory is an easy way to find an affordable advisor that suits your needs.

3. Consider what you want to do next: Do you want to head straight into a new business venture? Or perhaps you want to retire and travel? Decide how much money you will need from your business exit to support your lifestyle and future plans.

4. Obtain an accurate valuation: Having an objective and accurate valuation is crucial when planning a business exit strategy. This will help you avoid any discrepancy between your price aspiration and the actual market value of your business.

5. Get your management team ready: Potential buyers will look for a company that has a strong management team and efficient business processes that can easily be replicated. Make sure your management team has a strong understanding of your exit strategy and operational setup.

TIP: Stay ahead of the M&A game and be acquisition-ready as early as possible with an up-to-date, well-managed data room.

Join Foundy and advertise your business for free!

Join Foundy and you can connect with hundreds of credible buyers who are actively searching for new acquisition opportunities. We’re helping founders sell their startups in as little as 30 days and maximise their returns by making the process as quick and efficient as possible.

Foundy additionally offers specialised M&A advisory services across a wide variety of industries. If you're in the process of growing your business towards a funding round or an acquisition, clients have repeatedly recommended utilising a portal. It starts with a free business valuation. This will help you and our M&A advisors understand your company's current position and the necessary steps to position yourself for a successful sale. Foundy factors in over 29 key elements that contribute to your business valuation, ensuring a comprehensive and accurate assessment.

Similarly, if you're a buyer, Foundy's M&A advisors can help you find your next acquisition and streamline your end to end process via an all in one portal.

If you have any questions, reach out to our friendly team.

Ready to discover your business's value?

Running a business and deciding to sell or acquire another can feel like having two full-time jobs. While some business owners thrive on the excitement of buying and selling on their own, many, including myself, benefit from collaborating with experts who bring more sector specific experience. However, it’s important to note that working with M&A advisors is not a one-size-fits-all solution. Hence why we built our advanced portal and Find An Advisor programme to empower you with the tools, education and relevant expert support to help you navigate the end-to-end process and secure a higher valuation.

Check out the free calculator on our pricing page, which shows you the six to seven figures in additional share value Foundy can provide your business.

No matter where you are on your business journey, connect with Foundy to access the resources needed for a smoother acquisition or sale process.