Exiting your business is never smooth or stress free. Without an exit strategy, you’ll find yourself with far more stress than you counted on. You may also find that the whole process fails to deliver your expectations.

How can you make exiting your business as stress-free and tax-efficient as possible?

What is an exit strategy?

An exit strategy is a plan for what will happen when the day comes that you want to leave your business. There are various different types of exit strategy:

In order to determine the best option for you, firstly you need to define your exit goals. Do you want to stay involved in the business and retain some control over its future direction, or do you want to maximise your financial gain?

Making a plan

Once you’ve decided on an option, you’ll want to make a detailed plan. How will the transition take place? What steps will be involved?

The first thing to do is value the company. This is particularly important to know in the event of a sale, but it’s also relevant if you’re passing the business on to a family member or business partner. You’ll need to know its value in order to calculate the tax implications.

Many business owners don’t accurately value their own business. Often they take advice from friends at the gym or golf club rather than professionals. Getting a professional business valuation ensures the business is not over or undervalued and can help you the best possible price.

How do I pay less tax on exit?