How is exit becoming part of business strategy

As a nation we’re very good at starting businesses. 

In the UK, SME’s account for over 99% of the total business population and employ over 60% of the total workforce. There’s no doubt that the SME sector is an important part of the UK economy, but when founders set up their business, do they think about their exit? 

We don’t normally start a business thinking about how we’re going to leave it, but the reality is that none of us will live forever, so planning the future of our business, and how we want to leave it, should be an integral part of our retirement plan but it rarely is.  

We assume that if we just work hard, build our business, grow our customers and our revenue, then someone will want to take over the business in the future.  

The problem with that approach is that it’s a hope rather than a strategy. When the time comes there may be no identifiable successor and no one interested in buying the business. 

When you create your long-term business strategy you should be including your desired exit as the main aim or end goal for you and your business.

For example, if you want to leave the business to a family member or other successor, you’ll need a strategy for training, developing, and preparing that person for that role. 

If, however, your intention is to sell the business to a larger corporation then you need to structure, develop, and finance your business with that in mind.

In both cases it takes time to create the right foundations for a successful exit.

You need to incorporate your exit strategy as soon as possible, making sure that everything you do gets you closer to that goal. 

The rewards of a successful exit can be significant. 

On average, UK&I mid-market businesses (revenue £1m to £200m) were sold for around 5.35x EBITDA in H2 2024.

Deal activity also continued to rise, with sell-side transactions up 4% in H2 2024 (following a 9% increase in H1 2024).

SMEs remain attractive acquisition targets for larger corporates and investors because buying can be a faster way to gain market access, skills, technology and innovation than building it all in-house.

Sound attractive?

If you want to join the list of SMEs that successfully sell their business every year, then you should start by rewriting your business strategy with exit as its core.  

If you don’t know where to start, then get advice and support from people who know how this is done.

Most importantly, don’t leave it too late to think about exit.

When the time comes, you want to be able to enjoy the fruits of your labour.  

Want to discuss exit and business strategy in more detail?

Want to know how the Yellowyoyo team can help you build a strategy with your exit in mind?

We’d love to help.

You can contact us at hello@yellowyoyo.co.uk or leave us a message here.

Al