You’ve spent decades building your business, and the thought of selling it feels overwhelming – especially when you’re not even sure you’re ready yet. Most owners put off exit planning because they fear losing control, worry about signalling weakness to staff, or simply don’t know where to start. Here’s what you need to understand clearly.The risks of not having an exit strategy are substantial and measurable: businesses sold without prior planning typically achieve lower valuations, take three times longer to sell, and often force owners to accept unfavourable deal terms. This happens because unplanned exits leave you vulnerable to market timing, tax inefficiencies, key person dependency, and buyer leverage.
Why Most Business Owners Avoid Exit Planning
We hear the same reasons constantly: ‘I’m not ready to sell yet’, ‘I’m too busy running the business to think about leaving it’, ‘I’ve got at least another 10 years before I need to worry about that’.
Here’s the uncomfortable truth: the moment you start building a business, you should be planning how to exit it. Not because you want to leave tomorrow, but because businesses built with an exit in mind are fundamentally more valuable, more resilient, and more attractive to buyers. According to industry research, fewer than 30% of UK business owners have a documented exit strategy. The remaining 70% are gambling with their life’s work.
The Real Costs of Not Planning
Fire Sale Valuations
Without advance planning, you’re at the mercy of circumstance. Divorce, health issues, partnership disputes, or market downturns can force your hand. Buyers can smell desperation.
In the transactions we’ve seen, unplanned exits typically sell below market value simply because sellers lack leverage and negotiating position. When buyers know you need to sell quickly, they adjust their offers accordingly.
Key Person Dependency
If you are the business, if clients only trust you, if processes live in your head, if relationships depend on your personal connections, then what you’re selling isn’t a business. It’s a job that dies when you leave.
Strategic buyers won’t touch these businesses. The only buyers willing to take the risk will demand steep discounts or walk away entirely.
What happens in unplanned exits: revenue can drop 30-40% post-sale as clients leave, staff exodus when ‘the founder’ departs, operations collapse without institutional knowledge, and buyers pull out during due diligence citing ‘key person risk’.
Tax Time Bombs
Business Asset Disposal Relief (formerly Entrepreneurs’ Relief) can save you hundreds of thousands in Capital Gains Tax – but only if you structure ownership correctly before the sale. We’ve seen sellers lose £250,000 or more in avoidable taxes because they didn’t plan two years ahead.
Other tax planning opportunities requiring advance preparation include share structure optimisation, asset vs share sale implications, timing around tax year ends, spouse shareholding arrangements, and dividend vs salary extraction in pre-sale years.
You can’t fix these issues six months before sale. HMRC rules for Business Asset Disposal Relief require years of qualifying ownership and activity.
Market Timing Disasters
Imagine building a thriving hospitality business for 15 years, then being forced to sell in March 2020 as COVID lockdowns hit. Or selling a logistics company in 2008 as the financial crisis began.
Without a planned timeline, you sell when life forces you to – not when market conditions are favourable.
Business sale multiples can swing by 20-35% between strong and weak markets across different sectors. For a £2 million business, that’s £400,000-£700,000 left on the table simply because of timing.
Competitive Intelligence Leaks
Unplanned, rushed sales are rarely confidential. When you start ‘shopping around’ without a structured process, competitors hear you’re selling and circle like sharks, staff get nervous and jump ship, suppliers tighten credit terms, clients delay contracts or take meetings with rivals, and banks reduce facilities.
Leaving Money in the Business
Business owners without exit plans tend to extract profits as salary, don’t prepare financial statements for buyer scrutiny, and reinvest erratically. This makes the business look less profitable and less stable than it actually is.
Common missed opportunities include not tracking adjusted EBITDA (what buyers actually value), failing to document one-off costs that depress profit, owner’s market-rate salary not separated from dividends, no three-year trend showing consistent growth, and incomplete or inaccurate asset registers.
These aren’t lies or manipulation – they’re legitimate adjustments that planned exits account for. Without tracking them, you’re likely selling yourself short by 15-25% on average.
Deal Structure Nightmares
Sophisticated buyers structure deals to protect themselves. Without advisors and planning, sellers often agree to terms that transfer risk back to them after the sale.
Common unfavourable structures include earn-outs (‘We’ll pay you the full amount if the business hits targets over the next three years’), lengthy warranties (you guarantee everything about the business for 2-7 years, with any problems triggering clawbacks), deferred payments (‘We’ll pay you in instalments over time’), and consultancy lock-ins (‘We need you to stay for three years at reduced compensation’).
Planned exits with professional advisors structure these terms favourably – or reject them entirely. Desperate sellers accept whatever’s offered.
Starting Your Exit Strategy Today
Even if you’re not planning to sell for years, you can take meaningful action this month:
Get a confidential valuation.
You can’t improve what you don’t measure. Understand what your business is worth and what drives that value. No valuation? No baseline for improvement.
Document your key processes.
If you were hit by a bus tomorrow, could your business run without you for three months? Six months? Start writing down what’s in your head – operating procedures, client relationships, supplier contacts, decision frameworks.
Review your company structure.
Book 90 minutes with a corporate tax specialist who understands business sales. Are you set up optimally for an eventual exit? Some structural changes need two or more years to implement properly for tax purposes.
The Best Time to Plan Was Yesterday
We’re not saying you need to sell tomorrow. We’re saying you need to build your business as if you could sell tomorrow.
Because one day – whether by choice or by circumstance – you will exit your business. The only question is whether you’ll do it on your terms or someone else’s.
Most business owners spend decades building their company, then six months planning the exit. That’s backwards. The smartest exits begin years before the sale, when you have time to fix what’s broken, enhance what’s valuable, and structure everything optimally.
At Stonebrook, we guide business owners through exits they’re proud of – not rushed, not undervalued, not regretted. We specialise in planned exits where owners have the luxury of time, the benefit of strategy, and the confidence of expert guidance. That journey starts with a conversation, not a crisis. Contact us to discuss your specific situation.