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Running a business takes hard work, dedication and long-term planning. However, what happens when it’s time to step away? Whether you’re planning to retire, sell up or pass on the business to a family member, having a clear and considered exit strategy is essential. This strategy is your plan for how you’ll leave the business, with the goal of ensuring the process is orderly, secure, and on your own terms. However, many business owners neglect this part of running a business, often wrapped up in the day-to-day demands of running a company.
To better understand this issue, we conducted a survey of 250 UK small business owners, exploring their attitudes towards exit strategies, the types of exits they consider, and how far in advance owners are thinking about leaving their business.
Despite the importance of exit strategies, many business owners overlook exit planning entirely. In fact, our survey revealed that 79% don’t have an exit strategy in place, and more than a third (36%) have no plans to create one at all. Our survey also explores the reasons behind this lack of planning, the most common exit approaches being considered, and how far in advance owners are thinking about leaving their business.
Rebecca Alford, Chief Financial Officer at Capital on Tap also shares expert insights into the importance of an exit strategy and how to effectively build one.
The most and least commonly considered business exit strategies among UK small business owners
While the way you decide to exit your business varies from person to person, the common thread between the most popular strategies is a desire for clarity, control, and an ending that reflects the journey.
|
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% |
Selling to a third-party buyer is the most commonly considered exit strategy, with 47% of UK business owners open to this option. Its appeal likely comes from the opportunity for a clean break from the business and the potential for high returns, meaning the owner could walk away with a large sum of money compared to what they originally invested. However, it is sometimes the only realistic path for solo founders without a successor that doesn’t involve closing the business.
Family succession follows closely in second, considered by 46% of respondents overall. This strategy is far more popular among larger businesses, as 74% of those with more than 50 employees would consider this strategy. Family succession is a good option for business owners who want to continue their legacy and guarantee internal stability.
Selling to a co-founder is considered the third-best option amongst business owners, with 41% open to this type of exit. This is a good option for business owners who prefer to maintain control and preserve business culture. Among larger firms, this option, as well as employee ownership trusts, is even more popular, with 84% saying they would consider either strategy. Acquisitions (68%) and mergers (61%) are also more commonly explored by larger businesses.
Interestingly, winding down without a sale is most popular among newer businesses that operate for just 1–2 years (50%) and very small firms with fewer than five employees (47%). However, it is not limited to them, as 40% of long-standing businesses (over ten years old) also consider it. For some, this reflects a desire for full control until the end, or potentially the belief that the business has fulfilled its purpose.
At the other end of the spectrum, Initial Public Offerings (IPOs) are the least considered route, with just one in five (20%) business owners willing to take this path to exit. While IPOs can offer substantial financial rewards and visibility by listing shares on a public stock exchange, the process is lengthy and complex, requiring strong financials, regulatory approval, and significant preparation.
How far in advance are business owners planning their exit strategy?
Over one in five (22%) business owners believe that exit planning should be done when setting up the business, yet only 16% actually begin planning during this stage. A further 16% believe that it should be incorporated even earlier, during the business planning phase. Yet in practice, the most common time to begin exit planning is within the first one to three financial years, 18% considering it and 19% starting to plan during that period.
|
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% |
On average, business owners believe the ideal time to begin exit planning is just under five years into running their business, but in reality, it typically takes over seven years before they take meaningful action.
Despite these intentions, many never follow through. Almost one in five (19%) admit they’ve never actioned an exit strategy, and 21% have never sought professional advice on the topic. Only 24% consulted an expert before or during the setup of their business, with it taking just over 6 years on average to speak to a professional, highlighting a disconnect between exit strategy awareness and execution.
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.”
One reason for the lack of planning could be that some owners don’t envision themselves ever leaving - 18% say that they don't expect to fully exit their business.
Interestingly, the larger the business, the more proactive the owner appears to be around exit strategy planning. While those with the smallest businesses (less than five employees) tend to take around eight years and nine months to consider their exit, those with 51-250 employees take just over three years. On the flip side of this, those with larger businesses are more likely to believe they will exit the business sooner, averaging just over five years, compared to a suggested average of over 14 and a half years for those with smaller businesses.
In addition to this, a quarter (24%) of large business owners considered their exit during the business planning stage, and 16% actively sought professional advice early on. They also place more importance on early planning: nearly a third (32%) believe exit strategy should be built into the business plan, and another 16% say it should begin at setup. This suggests a possible link between early exit planning and long-term business growth - those who took a strategic approach from the outset may be more likely to have scaled their businesses successfully.
The biggest barriers to exit planning
So, if business owners intend to plan their exit strategies, what are the real reasons behind their hesitation to get started?
|
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% |
|
Lack of knowledge about exit options |
20% |
|
Uncertain economic outlook |
20% |
|
Financial planning for the transition |
19% |
|
Delaying the process due to the current business focus |
19% |
|
Lack of interest from family members |
15% |
Starting a business demands a lot of time, energy and personal sacrifice - so it is no surprise that 29% of business owners cite emotional attachment as the primary reason they haven’t planned their exit. This sentiment is even more pronounced among smaller businesses, affecting 35% of owners with fewer than five employees, compared to 24% of those leading companies with 51-250 employees.
Rebecca adds, “When you have invested so much into building a business, it is understandable that letting go can feel daunting. But without a clear exit strategy, circumstances beyond your control - such as illness, burnout, or unexpected life changes - could put you in a weaker position to negotiate sales, or force you to close your business entirely. Ironically, the desire to retain control can ultimately lead to losing it. Planning early allows you the opportunity to define what a successful transition looks like on your own terms. It’s a proactive step that not only protects your legacy but also gives you greater peace of mind about the future of your business.”
A major challenge for many business owners is finding the right person to take over. In fact, 28% say that identifying a suitable buyer or successor is a key barrier to exit planning. On top of that, 15% report a lack of interest from family members, adding to the concern, especially as 46% view passing the business on to family as their ideal exit strategy.
Logistical issues are also commonly named as barriers, including legal complexities (24%), difficulty with valuing the business (23%) and uncertain economic outlook (20%), all affecting more than one in five business owners. These sophisticated challenges may feel intimidating, but recognising them is the first step towards addressing them. Consulting with an expert early can help demystify these obstacles and ensure business owners are prepared well before an exit is imminent.
Rebecca notes, “One of the biggest pitfalls business owners face during an exit is a lack of preparation or the emergence of unexpected challenges. Anticipating potential complications in advance is crucial, and having a business credit card can offer essential short-term flexibility, helping to manage cash flow and cover unforeseen expenses.”
Feeling overwhelmed (21%) and having a lack of knowledge around exit options (20%) are also common barriers. With so much to navigate, it’s easy to put exit planning on the back burner. However, working with a professional advisor can ease the pressure, break down complex decisions, and provide clarity through each stage of the journey.
How to begin your exit planning journey
Planning your exit might feel overwhelming, but it doesn’t have to be. The key is to start early, stay flexible, and seek expert guidance when needed. Whether you're five months or fifteen years into your business, Rebecca shares key advice on how to start laying the groundwork for a smooth and successful transition.
Don’t wait for the perfect time, start now
Even if you’re not planning to leave your business for years, thinking about your eventual exit can influence the decisions you make today, from choosing a business structure to building internal leadership. Starting early puts you in control and helps you spot opportunities (or risks) well in advance.
Define what a successful exit looks like
Do you want to sell, pass it on, or wind it down? There's no one-size-fits-all answer. Start by identifying your personal goals and what matters most, whether that's maximising profit, protecting your legacy, or ensuring team continuity. Your ideal exit should align with your long-term vision.
Get expert advice and a business valuation
Professional advice can be invaluable, especially when navigating legal, financial or emotional complexities. An advisor can help you understand your options, value your business accurately, and prepare key documentation, making your business more attractive to potential buyers or successors.
Keep your plan up to date
As your business grows, so should your exit plan. Review it regularly, especially after major milestones like expansion, new partnerships, or economic shifts. A living strategy will always serve you better than one written and forgotten.
Sources and methodology
All data was taken from a survey of 250 small business owners. The survey was conducted in May 2025.
