Entrepreneurs -
My evening with insolvency experts: Supporting entrepreneurs through challenging business exits
Chris Dyer from our Commercial Banking team shares insights from an evening with insolvency experts, offering key advice for entrepreneurs navigating the complexities of business exits.
I recently had the chance to host a dinner with clients from the insolvency practitioner sector. It was a fantastic evening of connection and candid conversations. We dove deep into the challenges entrepreneurs face during business exits, a topic that, from years of experience, I know can be both emotionally and financially complex.
Here is a quick roundup of the valuable insights and advice shared by the experts around the table that evening.
A few themes stood out
One of the most significant themes of the evening was the emotional toll a business exit can take on an entrepreneur. Many practitioners shared stories of clients who struggled with stepping away from something they had built from the ground up. It is not just about the financial side – it is about leaving behind a legacy, parting ways with employees who have been there from the start, and, for many, a sense of personal identity tied to their business.
We also discussed the importance of entrepreneurs surrounding themselves with the right advisers. As you can imagine, the exit process is complicated, involving legal, financial, and operational elements. Those who seek high-quality advice tend to experience a much smoother journey, while poor guidance can potentially lead to costly mistakes or, worse, selling the business for less than its true value.
Preparation was another key topic. Those around the table agreed that the most successful exits happen when the entrepreneur starts planning several years in advance. One practitioner shared a success story about a client who began preparing for their exit three years before going to market. By the time the business was up for sale, it was in great shape, and the entrepreneur was well-positioned to negotiate a strong deal. In contrast, entrepreneurs who rushed the process often faced lower offers or deals falling apart.
My favourite quote from the night:
“Exiting a business is not just a financial transaction; it is the culmination of years of hard work, passion, and resilience. The key is to plan early, stay flexible, and ensure you have the right team guiding you through the process.”
Succession planning, especially in family businesses, was also highlighted as essential. The challenge of passing a business on to the next generation can lead to tensions within families, particularly if there are disagreements about the future direction of the company. One example shared involved a family business where siblings could not agree on the terms of succession, leading to costly delays and emotional strain. Having a clear plan for succession – whether to family, internal leadership, or external buyers – can significantly help smooth the exit process and ensure continuity.
Finally, post-exit planning emerged as a critical topic. Entrepreneurs often struggle with the “what is next?” phase after selling a business. Having a plan for life after the exit – whether it is starting a new venture, exploring philanthropy, or enjoying retirement – can help ease the emotional and psychological transition that follows.
My top tips from the night
Based on the insights from the dinner, here are my top tips for entrepreneurs thinking about their business exit:
- Start early: If possible, start planning your exit a few years ahead. This will give you more control and allow you to prepare your business for sale.
- Choose your advisers wisely: Surround yourself with trusted advisers who understand your goals. This could include legal, financial, and operational experts who can guide you through the complexities of the exit process.
- Prepare for the emotional side: Exiting your business can be emotionally challenging, especially if you have spent years building it. Be ready for the personal impact and ensure you have the support you need.
- Stay flexible: Deals do not always go as planned, so it is important to remain flexible and open to changes along the way.
100 entrepreneurs, 100 unique journeys
Curious about the different paths to a successful business exit?
Our upcoming 2025 report offers fresh perspectives from UK entrepreneurs – those who have sold their businesses as well as those considering the road ahead.
Discover:
- First-hand insights to guide your exit journey
- Insider knowledge from both sides of the exit experience
- Valuable lessons learned through the process
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100 entrepreneurs, 100 unique journeys
Our upcoming 2025 report offers fresh perspectives on the path to business exit.
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