Planning your business exit strategy is one of the most important decisions for ensuring a smooth and profitable transition when the time comes to sell or pass on your company. Whether you're looking to retire, pursue new opportunities, or move on, a well-structured exit strategy can make all the difference between a successful transaction and missed opportunities.

However, despite its importance, studies show that about 66% of business owners lack an exit plan. If you delay planning your exit until you're ready to leave, you've waited too long! Early preparation is essential for achieving the best results.

What is the Best Business Exit Strategy?

In 2024, founders have more options than ever, but M&A (mergers and acquisitions) remains one of the most popular and effective exit routes. This strategy can align with various goals, especially for startups and growing businesses seeking to maximise value.

Pros of M&A Deals:

• Control Over Terms: Founders can set their own terms for the sale and maintain control over price negotiations, ensuring they align with their goals.

• Immediate Buyer Demand: A buyer typically has an immediate need for your product or service, making the transition smoother and faster.

• Competitive Bidding: In an active market, multiple buyers may bid against each other, driving up your business’s valuation.

• Resilience in Tough Economic Times: The M&A market has remained robust despite global economic challenges, proving its reliability as an exit strategy (more on this below).

Aside from M&A, other exit strategies include management buyouts (MBO), initial public offerings (IPO), and acquihires - though these are less common.

For many founders, navigating the right exit option involves understanding the benefits of each approach and consulting with industry experts. Whether you're a first-time entrepreneur or an experienced CEO, making an informed choice about your exit is critical.

Suggested Reading: Business Exits: Choosing the Right Strategy

Has M&A Been Impacted by the Global Recession?

The global economic slowdown has certainly affected many industries, but M&A activity has shown remarkable resilience. According to McKinsey, the total value of large deals in 2021 increased by 67%, peaking at $5.9 trillion - up 37% from 2020​. The strength of the M&A market even during challenging times proves that it remains a viable option for founders looking to exit.

Moreover, investment banks and M&A brokers have adapted to market conditions by providing deeper industry-specific insights and leveraging data to ensure founders receive maximum value for their businesses. This makes M&A advisory an essential part of any exit plan.

When Should I Start Planning My Exit Strategy?

Planning your exit strategy often feels like a distant concern when you're focused on growth. But delaying this process can lead to missed opportunities or rushed decisions when you're finally ready to sell. By getting acquisition-ready from day one, you'll be prepared when the right deal arises.

Start preparing early to avoid common pitfalls. Waiting until the last minute might result in hasty decisions, a lower valuation, or complications during negotiations. In today's competitive market, planning ahead gives you a significant advantage.

5 Tips to Plan an Effective Business Exit Strategy

1. Choose the Best Time to Sell Timing is everything. Deciding when to sell your business is one of the most critical choices you’ll make. Monitor industry trends, market demand, and your personal motivations for selling. Founders in sectors like SaaS, e-commerce, and AI have seen high acquisition interest, making now an ideal time to evaluate potential deals.

2. Speak to an M&A Advisor M&A brokers and M&A advisory services can offer key insights into the acquisition market. Partnering with experienced advisors from an early stage helps you navigate the complex transaction process and identify potential buyers. Foundy, for example, provides clients with step-by-step expert support and access to over 1.1 million transactions, helping founders make informed decisions.

3. Determine Your Next Move After selling your business, what’s next? Whether you want to launch a new venture or retire, it’s essential to plan your post-exit life. Knowing how much you need from the sale ensures that you set the right goals during negotiations and avoid undervaluing your business.

4. Obtain an Accurate Business Valuation An objective business valuation is crucial when planning an exit. Valuation discrepancies between your expectations and market realities can hinder negotiations or derail deals. Foundy’s business valuation tools are designed to assess over 29 key factors, ensuring you get a realistic and comprehensive understanding of your company’s worth. Plus, with AI-powered insights and data-driven analysis, you can expect an accurate reflection of market conditions.

5. Prepare Your Management Team Buyers will want to see a company with a solid leadership team and efficient, replicable processes. Before pursuing a sale, ensure your management team understands your exit strategy and is prepared to continue the company’s operations without your direct involvement. A strong management team will make your business more appealing to buyers, helping you secure a better deal.

Exit Strategies for Founders in 2024: What's Changed?

As we move through 2024, a few trends have emerged that founders should consider when planning their exit strategies:

• Increased Buyer Demand for Tech-Enabled Businesses: Businesses in sectors such as SaaS, AI, fintech, and e-commerce are seeing heightened interest from buyers. Investors are keen on businesses that have proven resilience through digital transformation.

• Data-Driven Decisions: With access to more data than ever before, buyers expect detailed and accurate business valuations. Platforms like Foundy use AI to offer in-depth insights into how 29 factors impact a company’s worth. These tools are invaluable for founders looking to sell their business at the right time.

• Shorter Deal Timelines: Buyers are seeking faster transactions to mitigate risks, and founders can benefit from streamlined processes. Foundy’s platform, for instance, cuts deal timelines from the nine-month industry average to just over four months by combining AI automation with expert human advisors. This is a stark contrast to traditional business brokers and M&A brokerage firms that rely on slower, more manual processes.

Have You Tried Foundy’s Free Business Valuation Tool?

Accurate valuation is a foundational part of any exit strategy. Foundy’s free business valuation calculator allows you to assess your company’s value based on a four-minute questionnaire. The tool provides a 6-page report that highlights how different factors—ranging from financial performance to market conditions—affect your valuation. It’s a free, fast, and insightful way to prepare for an exit, with no strings attached.

Be Ready for the Right Opportunity

The future is bright for founders considering their exit strategy in 2024. By working with experienced M&A advisors and leveraging data-driven insights, you can avoid common pitfalls and secure a higher valuation when the time is right.

If you're preparing to sell your business, start by obtaining an accurate business valuation and partnering with experts who can guide you through every step of the process. Foundy’s Triangular Model provides the perfect blend of AI-powered tools, expert advisors, and access to over 1.1 million transactions to help you achieve the best possible outcome for your business.

Join Foundy and Start Planning Your Business Sale Today

Selling your business is a major decision, and Foundy ensures you're fully prepared to maximise its value. Our transaction planning service evaluates your business’s true worth and crafts a tailored growth roadmap. When you're ready, our deal execution service prepares everything for the sale, including presentation materials, acquirer outreach, negotiations, and guiding you through to completion.

Foundy’s Triangular Model integrates AI, trained on historical acquisitions, with expert advisers from your industry and a collaborative platform. This approach enables our AI-powered advisors to consistently secure higher valuations and close deals faster than traditional M&A brokers or business brokers. On average, Foundy completes deals in just over four months - compared to the industry median of nine months.

Foundy provides specialised M&A advisory services across multiple industries. Whether you're aiming for a funding round or preparing for an acquisition, start with a business valuation to understand your current position. Our M&A advisors and AI-driven insights - backed by access to over 1.1 million transactions - will help you achieve a successful sale.

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.