Nearly 50% of small business owners consider selling to a third-party
Selling to a third-party buyer is the most popular exit strategy, considered by 47% of UK business owners. It offers a clean break, potential high returns, and is often the only option for solo founders without a successor.
Family succession is the second most popular exit strategy, chosen by 46% of owners and by 74% of businesses with over 50 employees. Selling to a co-founder is also common, with 41% of owners open to it. Among larger firms, 84% consider either selling to a co-founder or using employee ownership trusts. Acquisitions (68%) and mergers (61%) are also popular options.
Exit strategy | % of business owners who would consider this exit strategy |
Put the business up for sale to someone not currently related to it | 47% |
Family succession | 46% |
Sell to a business partner or co-founder | 41% |
Wind-down without sale | 38% |
Acquisition by a larger company | 38% |
Merger with another company | 34% |
Management buyout | 29% |
Employee buyout | 29% |
Employee Ownership Trust | 29% |
Liquidation | 21% |
22% of owners believe an exit plan should be considered when setting up their business, despite only 8% actioning this
Similarly, 16% of small business owners think exit planning should begin when writing the business plan to allow for clearer long-term decision-making from the start, with just 3% heeding their own advice.
Interestingly, the least favoured time to start planning an exit is between the 16th and 20th financial year, suggesting that most owners recognise the importance of planning well before the later stages of business life, rather than leaving it too late.
Rebecca Alford, chief financial officer at Capital on Tap adds, “Too often, business owners miss out on maximising the value of their business or face unexpected complications – simply because they haven’t been fully informed about how to develop an exit strategy tailored to their specific circumstances. A qualified advisor can help you structure your exit to maximise financial return, avoid costly mistakes, and create a smooth transition for everyone involved. The earlier you can seek this advice, the more prepared you will be later on.”
x | Think owners should plan an exit | Began actioning an exit strategy |
When setting up my business | 22% | 8% |
When writing up a business plan | 16% | 3% |
1st – 3rd financial year | 10% | 14% |
4th – 5th financial year | 8% | 7% |
6th – 7th financial year | 7% | 7% |
8th – 10th financial year | 6% | 9% |
11th – 15th financial year | 5% | 8% |
16th – 20th financial year | 4% | 6% |
More than 20 years | 6% | 7% |
Never | 10% | 19% |
Emotional attachment to the business is the biggest challenge for small business owners deciding to exit their business
One of the most significant challenges when it comes to deciding when to exit their business is emotional attachment, with 29% of owners admitting that letting go of the business they’ve built is their biggest obstacle. This is followed by finding the right buyer or successor, with 28% saying this is a major issue. Also, 24% find the legal side of exit planning very tricky, as contracts, compliance, and regulations can be tough to navigate without help.
For 23%, accurately valuing their business is a key hurdle. Determining a fair and realistic valuation is crucial for negotiating a successful exit; however, many find this step particularly challenging without expert guidance.
Exit strategy challenges | % of business owners who think this is the biggest challenge when deciding to exit their business |
Emotional attachment to the business | 29% |
Finding a suitable buyer/successor | 28% |
Legal complexities | 24% |
Difficulty in valuing the business | 23% |
Feeling overwhelmed by the idea of planning an exit | 21% |