A business takes up a significant amount of your time, thoughts and energy. If you have been running it long-term, it likely feels like an integral part of your life.
As a result, the decision to leave is never simple. However, there will come the point for every entrepreneur where it’s time to move on for the benefit of yourself and the company.
If you are toying with the idea of stepping aside from your business, we have listed the six signs that you may be ready to exit and how to do so effectively.
Signs you’re ready to exit
- You’re no longer passionate about your business
Running a business isn’t easy. It requires dedication and vision that makes the struggle worthwhile. Many entrepreneurs start with the motivation and passion needed to drive their venture to success, but over the years, it may dwindle.
If you are struggling to invest yourself in the business, it might be a sign that you’ve come to the end of the road. Forcing yourself to stay will likely impact your happiness while negatively affecting company performance.
- You’ve reached retirement age
Once you reach a certain age, it’s time to enjoy life at a slower pace or focus on interests outside of your career. When you have spent years leading a business, it’s the perfect opportunity to enjoy the hard-earned fruits of your labour.
In some cases, you may also need to retire due to ill-health that makes it hard to run a company daily.
- Your lifestyle and circumstances have changed
Your life when you first started your venture may look very different to your life now. Circumstances change over time, with health, family and financial factors all influencing.
As circumstances evolve, so do your priorities. Sometimes, you may need to move to a new location or make more time available. If it reaches the point that you do not have the capacity or ability to lead a business anymore, it’s generally a sign to step aside.
- You’re ready for a new challenge
For some entrepreneurs, the appeal is tackling challenges and following innovative ideas. Once you have taken your company to a certain point and realised your vision, you might be itching for new pastures.
Exiting your business gives you the freedom to pursue your next project, including bringing another entrepreneurial idea to fruition.
- You need to cut your losses
If your business has entered a period of trouble or financial decline, sometimes there’s no route upward. Your best bet is to cut your losses and exit before you end up in worse circumstances.
By exiting – either by sale or liquidation – you will also minimise any impact on your personal finances, which can often be drained by a failing business.
- You’re no longer the best person to lead
While you may have been responsible for bringing your business to life and guiding it through the challenging starting stages, it doesn’t necessarily mean you will always be the best person to lead. Sometimes you will reach a point in your growth where you can’t take it forward.
Another owner may be better equipped to navigate the course, utilising their unique skills, experience and vision.
It can be hard to admit that you’re limiting the company’s success, but recognising when it’s time to give the reigns to someone else is crucial to protecting your legacy and allowing the company to reach new heights.
How to exit your business
If any of the above scenarios apply, it may be time to leave your business. Ideally, you will already have a strategy – created when you first began the venture – outlining your intended exit path.
Typical routes of exit include:
- Liquidation – where you sell assets and close your business, avoiding the need for a sale
- Family succession – passing the business onto a family member to take forward
- Management buyout – allowing an existing management team to take control
- Sale – transferring ownership to a third-party buyer for the right price
- Initial Public Offering – selling shares of your business to the public
- Merger/acquisition – where another company absorbs yours to form a larger business
The route you take will depend on your circumstances. It is worth getting a company valuation first to understand which option might suit you financially.
If you aren’t fully ready to exit, other options include bringing a partner on board to support you in running the business or reducing your stake.
A UKBA advisor can guide you through the exit process, including creating a strategy that suits your goals and maximises business value.