Six ways to leave your business – a guide to SME exits
At a glance
- Discover six primary exit strategies for SME owners, including trade sales, management buy-outs, and liquidation, each tailored to different aspirations and business dynamics.
- Understand the role of financial advisers in determining the right exit option for you, ensuring it aligns with your financial goals and legacy aspirations.
- Learn the importance of planning and professional guidance, particularly in tailoring your exit to secure your future and financial freedom.
If you’re a UK SME owner thinking it’s time to hang up the boots, pour the gin, and sail off into a spreadsheet-less sunset, you’re not alone. Whether you’re dreaming of tropical beaches, tinkering in a shed full of gadgets, or just never want to hear the words “VAT quarter” again, there are ways to leave your business. Richard Murray, Chief Commercial Officer at Business Growth Advisory Elephants Child sums up the big ones:
1. Trade Sale
A full trade sale is the classic breakup. You find a strategic buyer – maybe a rival, maybe a bigger fish – who sees your business as the missing piece of their corporate puzzle. It can be lucrative and feel satisfyingly final.
But like any intense relationship ending, it can be emotional and highly rewarding. Your baby now has a new parent. Just hope they’re not into corporate rebranding and mandatory team-building weekends.
2. Partial exit
Don’t want to give it all away just yet? A partial sale to an investor (think private equity or growth capital) lets you de-risk and pocket some cash now, while keeping some skin in the game. You might even scale faster with their backing.
This is the “I’m not breaking up, I just need space” of exits. You get a bit of freedom, but you’re still answering calls on Monday morning.
3. Management buy-out
Your trusty managers know the ropes – why not let them take the reins? With a Management Buy-Out (MBO), the people running the business already become the ones who own it.
It’s tidy, it’s loyal, it’s kind of like leaving your dog to someone who actually loves dogs. The team often brings in external finance to help, meaning you can still get paid properly. Just make sure they know what they’re doing, enthusiasm is not a business plan.
4. Employee ownership trust
Want to leave a legacy? An Employee Ownership Trust (EOT) lets you sell the business to your employees via a tax-efficient structure. You get a fair price, they get control, and the business lives on in democratic harmony.
It’s like the business version of moving out and leaving your house to a commune. Slightly idealistic, incredibly tax-friendly, surprisingly sustainable.
5. Liquidation
Sometimes the cleanest break is the bluntest. If your business has served its purpose, has little resale value, or you just want out now, a solvent liquidation (Members’ Voluntary Liquidation MVL) might be your route.
You wind everything down, distribute the assets, and walk away. It’s tidy, final, and oddly liberating. Like deleting LinkedIn forever and moving to a log cabin.
6. Stay owner, hire a boss
Don’t sell at all. Appoint a Managing Director or CEO to run the day-to-day, while you retain ownership and enjoy the dividends. Passive income, no weekly team stand-ups.
This is the “it’s not you, it’s me” approach to exiting. You don’t leave the business, but you absolutely leave the building.
What’s your exit strategy?
Talk to your financial advisor before you make a new plan. If the exit will not generate enough income for you to retire then you may need another avenue. But if you know what you need financially, and the legacy that you want to create, then we can help find the exit option that fits.
One client I worked with recently explained: “I wanted some advice based on someone who had knowledge of the market. I felt like I didn’t know enough and really wanted somebody with that expertise and really appreciated the advice from Richard on where to go.”
Until then, keep planning – and know that when it comes to leaving your business.
Want to explore your options?
Get in touch with a Financial Adviser to explore your exit options and ensure a relaxed transition into your new chapter. Don’t navigate this journey alone—expert advice awaits.
Elephants Child Consultancy provide a consultative, analytic approach to leading, developing and implementing successful business strategies, and they are a corporate partner of St. James’s Place.
The services provided by these specialists are separate and distinct to the services carried out by St. James’s Place and include advice on how to grow your business and prepare your business for sale.
Where the opinions of third parties are offered, these may not necessarily reflect those of St. James’s Place.
Business exit planning may include the referral to a service that is separate and distinct to those offered by St. James’s Place.
SJP Approved 17/06/2025