Exit Strategies for Owners of Small and Medium-Sized Businesses

What options are available?

Before choosing a path forward, every owner needs to think carefully about what they want to achieve from an exit. Is the goal to maximize the purchase price? To ensure the company and brand continue unchanged? To remain involved in some capacity – or, on the contrary, to create the possibility for a fast exit? Clear priorities make it easier to choose the right strategy and guide the process.

An exit doesn’t always mean a sale to an external buyer. There are several possible routes, including:

• Management Buyout (MBO): The management team takes over the company. This provides continuity and stability since they already know the business and its culture.
• Financial buyer: A partnership that can provide capital for growth. The owner can often retain a stake and continue to participate in the company’s development.
• Family succession: The company stays within the family, but requires careful planning to balance family dynamics with business objectives.

Each option requires a different timeline for preparation. An external sale often takes more than a year to prepare, plan, and complete. An MBO can take even longer, as financing must be secured and leadership developed. Family transitions often span several years and demand well-structured succession and tax planning.

How to build value before an exit

Value creation starts long before you go to market. Stable profitability, a strong organization, a clear plan forward, together with documented routines and processes, create trust among buyers and investors.

Market position is just as important. Companies with clear competitive advantages and a diversified customer base often achieve a valuation premium.

Preparation for due diligence is critical. Accurate financial reporting and accounting, secured intellectual property rights, and well-structured agreements make the transaction smoother and more secure. Ownership structure also matters – clear shareholder agreements and good governance reduce the risk of issues in critical negotiations.

The timing of your exit affects both valuation and execution. Market conditions, industry trends, and the company’s stage of development all play a role. An experienced M&A advisor can help you navigate these factors and keep your strategy flexible.

The key to a successful exit

A successful exit depends on having the right advisor by your side early in the process. An experienced M&A advisor can contribute with both strategy and execution – from structure and timing to negotiation and closing.

The difference between an acceptable result and an exceptional one often lies in the advisor’s ability to combine strategic thinking and networks with strong execution.

Your company is the result of years of commitment, hard work, and relationships. Your exit strategy should therefore both maximize value and ensure the company’s future is built on the right foundations.

Whether you are planning a sale in the near term or preparing for a future transition, the preparations you make today will determine the outcome tomorrow.

Want to learn more about the exit options available for you and your company?
Talk to FLB Partners – we guide you toward the right solution for your specific situation.