Few business owners realise that there are multiple ways to sell and exit your business so we will guide you through the pros and cons of each one, alongside your own personal preferences and wishes.
Many of the exit options will be determined by the size and market strength of your company, how dispensable you as the owner are, how good your management team are and if they want to be involved in the buy out process.
Here is a brief summary of the terminology and sale routes:
Management Buy-in (MBI)
An external management team buys into a company and takes over as the new management team
Buy-in Management Buy Out (BIMBO)
A hybrid of a MBI where the incoming team work with members of the existing management team
Full Sale to third party
The more traditional sale of the company’s shares or its assets, usually allowing for retirement and or complete exit from the business for the owner.
Partial Sale to a third party
The sale of a minority or majority of the company’s shares, allowing the owner to realise some of their investment whilst bringing in new and enhanced skills and expertise to take the business forward.
Owner Backed Management Buy Out (MBO)
The management team buy the owners shares. It is typical the buy out team will need funding to make this transaction and the owner themselves quite often lends the money to complete the sale.
Private Equity Backed MBO
An external funder backs the management teams’ purchase of the shares and assets and the private equity house typically own a majority stake in the company. A gradual transfer of ownership takes place as the management team buy back shares as the company flourishes.
Here at Moulds & Co Accountants we are happy to work with you on the most favourable option for you and your business. We will help you work through your exit options and navigate this tricky financial landscape smoothly and efficiently.
Contact us to get started or alternatively, request a call back.
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