Financial Matters with Jane Dennis: Why every business owner needs an exit plan

A good plan will help you tidy up financial records, secure long-term contracts, strengthen leadership, and ensure systems are in place that make the business more attractive to buyers or successors.

Exit planning can also highlight areas where value is currently locked in, for example, if too much of the business depends on you personally. By addressing these issues early, you make the business more stable and reduce risk for future owners.

Unexpected life events such as illness, family changes, or economic shifts can quickly bring about the need to exit the business. If you are unprepared, this can lead to hurried decisions, disputes, or financial shortfalls. A well-considered plan helps you stay in control, even if circumstances change suddenly.

It also protects employees, customers, and suppliers. Knowing there is a continuity plan in place builds confidence and ensures that the business can continue running smoothly during a transition.

Leaving a business has tax consequences, whether through Capital Gains Tax, Inheritance Tax, or income withdrawals. Exit planning gives time to structure the business in a tax-efficient way.

Even if you love what you do, there will come a time when you want to slow down or move on. Setting a clear goal and timeframe helps guide business decisions. It also helps family members or co-owners understand your intentions. This avoids conflict later and allows others to plan their own roles accordingly.

Exit planning is not just about leaving, it is about shaping the future of your business and ensuring that the rewards of your hard work are protected. By starting early, you give yourself time to increase value, reduce risk, and leave on your own terms. A professional adviser can help you map out the right strategy and keep it under regular review.