Exiting a business can be challenging for any entrepreneur. When Olly Swanton considered selling global communications agency Way to Blue, he needed to separate himself from its day-to-day operations. 

“After speaking with my colleagues, I decided that a three-to-five year earn-out was probably not the sale structure that would make me happy. So the realisation that I had to quickly come to was that, if I was going to exit, I was doing it on day one,” Olly says.

“Knowing this, I spoke with various corporate advisors in my sector who were unanimously of the opinion that this wouldn't be possible for a business founded by me, run by me day-to-day and grown by me. So as a result, I had to begin a long and arduous journey of effectively exiting my business, before I could even sell my business.” 

His lesson? It’s crucial for entrepreneurs to understand the various exit routes they can take before committing to a sale.

After deciding on an exit route from his business, Olly prepared the company for life after his leadership. He did this by encouraging staff autonomy.

“Succession planning for me was about setting [teams] up with the tools so that they could control their own destiny. I spent a lot of time when they raised issues, asking them ‘what do you think?’ or ‘what would you do?’” he says. 

“I wanted to help them see that for the past 10-12 years, I'd made every mistake in the book, and help them understand that making mistakes is ok.” 

As part of this succession process, Olly began to mentally prepare for his departure too.

“A lot of people will regard their businesses to be ‘their baby’. If you don’t divorce yourself emotionally from your business before a sell-out, you will find that process much harder to deal with,” he explains.

When going through the sale process, conversations with like-minded individuals are vital. 

“There are a number of people you need around you in your life, both on a personal and professional level – whether they’re being paid to consult you or just in your wider team. You should also seek advice from professionals in the M&A sector who will be absolutely vital to give you the info that you need. But you also need other fellow entrepreneurs,” Olly says. 

“Together we all have a different conversation than we would with our professional advisers, and some of the best advice I got was from being with other entrepreneurs.”

Investec is able to facilitate these connections. Wesley Harrison, Senior Financial Planning Director at Investec Wealth & Investment says: “We like to act as counsellors for our clients, and a sounding board for their future plans. We can also put people in touch and help them build their networks… Often the most important people to speak to are other entrepreneurs who have been through the same process.”

Of course, the process of selling a business does not come without unexpected problems so it’s important to have a clear back-up plan.

“You have to have a bottom line; the absolute minimum that you’ll sell your business for. Work out what your absolute minimum is from the perspective of a buyer, then just don’t go below that,” Olly says. “If you think you're going to – have a plan B.”

Boundaries are important because once the process has started, it’s difficult to backtrack.  

“The financial cost implication of going through the sale process means you can’t just carry on as if nothing happened. The emotional cost to your management team and the people in the business is also enormous. It's like giving someone a cake, then before they can eat it, taking it away.”

While the sale of a business is often all-consuming, it’s important to think about what you’ll do after completion. This includes how you will use any proceeds and safeguard you financial security. 

Wesley explains: “We have lots of conversations with clients about where they want to move to, tax efficient retirement or gifting to the children,” he says. “Common considerations are: will you have an earn-out, or will you still be receiving a salary? Are you setting up another business, are you going to retire? If so, what does that look like?”

Asked about the right time to engage a financial planner, Olly insists: “You can't do it soon enough, because the intel you will learn is absolutely vital.”