Exit strategy

Many company owners put in a lifetime of hard work into building their business, only to throw away some of the rewards by failing to fully consider how they will exit – both financially and as a leader.

Sound management over several years will add value to your business and let you begin your exit relatively quickly when the time is right.

You’ll need to concentrate on the following key areas to ensure a smooth exit:

• Aim for a year-on-year increase in profits – reducing profits to cut Corporation Tax liabilities may make short-term sense, but it could harm your business’s perceived value.
• Ensure your accounts are in order and up to date, giving a true picture of the business. It pays to be ready for any due diligence that may be needed later.
• Look to expand your range of customers and suppliers – over-reliance on a few key customers will undermine your business’s value.
• Aim to tie key customers, suppliers, staff and managers to long-term contracts.
• Maximise your relief for Capital Gains Tax (CGT) – you might be able to claim entrepreneurs’ relief, which reduces the effective rate of CGT.
• Consider avoiding substantial holdings in property, shares or leaving money in the bank, which may disqualify you from this relief.

The levels and bases of taxation and reliefs from taxation can change at any time and are dependent on individual circumstances.

Please note that advice on exit strategy planning might involve the referral to a service that is separate and distinct to those offered by St. James’s Place.