Exit Plans – Disposal Strategies for Businesses

Planning for exiting a business is as important as starting a business. You have to plan as to what will happen of your business in case you decide to change your business to retire. Your own family members might not be interested in taking over the business.
Business disposals can arise at any point in life and you need a plan to gain the maximum out of that as well. So, how do you plan to exit?

How to prepare your company for sale?

• Groom the business so that it is in its best when you decide to sell it.
• Value your business and get an appraisal as to how much it is worth.
• Plan on what strategy to implement.
• Identify your potential buyer.
• Negotiate and agree only to the right price.
• Take care of the due diligence and other legal processes. Hire a commercial attorney to help you out with legal proceedings.
• Final step:  Transfer of ownership. The UK business law governs this area of business transaction.

Strategies for disposal of businesses

• Sale

The most common way to dispose off a business is to sell it. Such a sale is less complicated and can be done between the two agreeing parties without the elaborate government regulations. A sale typically means the seller gets money from the buyer in exchange for selling the company.
The trick here is to get the right amount of money. And for that you need to bring your company to that level so that the appraisal should a hefty figure.

• IPO

Initial public offering is done via the stock market to attract potential buyers. IPO cannot be done without an experienced lawyer. This is one of the best strategies as this one pays much better than any of the other options available. Cons will be achieving liquidation. The law restricts high liquidation through this method.

• Mergers

Mergers are great ways to sell the business. Your company will get the brand name of the bigger company and the share holders get bigger and better stocks. But the con is that payment of money is not immediate.

• Buyout

A buyout happens when someone buys the shares and takes over the business. The buyer will usually have his/her own business in the same line or sometimes from the same management. The amount is paid up front or in installments as cash.

• Liquidation of assets

You can liquidate your assets by shutting down the business and selling all the assets of the companies. This way the company no longer exists. You will have to negotiate will prospective buyers for the right amount.

Here there is not much room for bargaining. You just nod to whatever price your buyers quote for the raw assets that you offer them.

Think carefully as to which strategy suits your business and plan accordingly. A legal advisor by side will be a plus point.