Business exit essentials: emotional preparation and practical strategy

Navigating the emotional aspect of a business exit 

An exit strategy is more than a financial plan; it is about preparing for a significant life transition. Business owners have to deal with the emotional and personal aspects of letting go, along with protecting the legacy they built.

You are likely to feel a wide spectrum of emotions during your business exit journey, from excitement to trepidation. As a business owner, it is important to acknowledge these feelings while being guided by good judgment and expert advice.

Attachment to your creation

Founding and nurturing a business can feel similar to raising a child. You have invested years of unwavering dedication and passion to see your venture flourish. As you consider the prospect of letting go, it is natural to feel a sense of attachment, even identity, with your business.

Reframing your perspective can be helpful here. Instead of seeing the exit as abandonment, think of it as the next chapter of your legacy, one where you pass the baton to those who can continue the journey you started.

Fear of the unknown

Moving away from the familiar territory of running a business can trigger fear and uncertainty. In this case, seeking guidance from experienced professionals can make all the difference. 

Engaging with financial advisers, wealth planners and business consultants will fortify your financial standing and provide valuable insights into the new opportunities that await you.

Here are three ways you can address the emotional challenges that come with a business exit:

1. Be clear about your objectives

Have a vision of what you want to achieve beyond the exit, both financially and personally. This will empower you to navigate the process confidently.

2. Build your support network

This can be challenging emotionally as well as logistically. Surround yourself with supportive people, including family, friends, and fellow entrepreneurs who have gone through similar transitions. Their advice and understanding will give you reassurance as you exit your business.

3. Celebrate the journey

Reflect on the achievements and milestones you have accomplished with your business and be sure to honour the hard work and dedication that you and your employees poured into this venture.

Defining a successful business exit strategy

A business exit strategy is a meticulously crafted plan that outlines how you, as the business owner, intend to depart from your current venture, while maximising its value and ensuring a seamless transition.

A well-considered strategy provides a roadmap to financial success and personal fulfilment post-exit.

Top business exit considerations

Our survey of business owners found the top three non-monetary factors of consideration were:

• Ensuring employees were well looked after: 59%
• Ensuring clients were well looked after: 49%
• Maintaining the brand and reputation of the business they had built: 35%

What is clear, it is not just the financial transaction that occupies owners. There are other stakeholders in the ‘ecosystem’ of any business. Challenges emerge in terms of maintaining employee and client relationships and brand reputation of the business. These need to endure and thrive long after the owner has stepped away.

Here are some steps you can take to uphold these priorities.

1. Communicate with employees

To protect employees and maintain productivity during an exit, two-way communication is vital. Explain the impact of the exit on their roles and the timelines you are working to. If a sale is going to result in roles being lost, make sure you have fair packages in place or you support staff with career transition plans. And do not forget that your employees maintain client relationships and have key knowledge that keeps your business running, so their input can help you map out your exit strategy.

2. Focus on the detail

Keep a keen eye on contracts with clients and agreements made during the exit process. Make sure you are happy with how you are leaving things with the firms you have built relationships with over the years.

At times an exit can feel relentless and you are often bombarded with information, so you may need a team around you who comb through the details on your behalf.

3. Trust the culture you have built

A business’s reputation is often underpinned by a strong company culture. Although you will no longer be responsible for maintaining the culture after an exit, trust that the values you have instilled in the people you employed will live on after you have left. On the flip side, you also have to mentally prepare for the fact that someone else will be in control of the business and may take it in a direction you disagree with. Understanding their intentions during the exit is important, but at the end of the day once you leave, you have no control.

Planning a mindful business exit

Before you exit your business, there are several things you need to consider and prepare. Here are six tips to help you move in the right direction:

You are likely to feel a wide spectrum of emotions during your business exit journey, from excitement to trepidation. It is important to acknowledge these feelings while being guided by good judgment and expert advice.

How can a private banker support your financial success after a business exit?

With careful planning, expert advice and support from partners like Arbuthnot Latham, you can create a seamless transition that secures your financial and personal goals after the exit has taken place.