02: Selling options

The most common exit option is to sell to another business, including competitors, suppliers, customers and new market entrants. Other alternatives include management buyouts, family successions and selling to financial investment companies.

The sale price will depend both on the attractiveness of the business that you have developed (especially in terms of recurring revenue) and on your motivation for selling. Year-on-year increased profitability, high quality innovative products and services, clear financial records and a loyal customer base will all count as positive factors.

The quality and stability of management is also an important consideration. A business may be worth far less if key personnel leave, and many small businesses are held together by the personality of the proprietor. So a second line of competent management is important.