Consider your exit strategy when starting up a business

The exit process you will have to go through will depend on how you are exiting the business.

Selling the business

If you are selling the business there are several stages you will go through:

• grooming your business for sale
• valuing your business
• identifying and marketing your business to potential buyers
• negotiating with potential buyers
• completing legal due diligence
• finalising the sale and transferring ownership

Prior to the sale, you should get the business into shape by reducing unnecessary overheads, debts and excess stock and getting your finances into good order. You will also require detailed financial information, including audited accounts and forecasts which you can prepare in advance. See preparing to sell your business.

You should seek specialist advice from your accountant, solicitor or corporate finance adviser. They will help you reach a realistic valuation, and identify and market your business to potential buyers. See value and market your business for sale.

Flotation

Businesses planning a flotation will go through a similar process and will require a detailed business plan, prospectus and accounts which comply with specific accounting standards. See further information on floating on the stock market.

Closing the business

If you are simply closing the business, the process should be much simpler. You should contact the relevant authorities to advise them you are closing down and calculate and pay off any outstanding liabilities (such as VAT) and debts. See selling or closing a business.

If you have employed any workers you will also need to give them the proper notice and any outstanding pay and benefits. For further information on making employees redundant, see issue the correct periods of notice and redundancy: the options.