In the last issue of Recruiter we revealed how there’s never been a better time to sell your business in the recruitment market. But what other options are available? Below, financial advisors Livingstone Guarantee offer some advice on planning a successful exit strategy?

How will I know if it’s the right time?

There comes a time in every private company when it makes sense for the shareholders to consider a change of ownership. This ‘crossroads’ might involve:

* Your shareholders may want to retire, realise some cash or resolve irreconcilable differences

* Your business may not have an obvious successor going forward

* Directors and investors may want to realise cash following a management buy-out or buy-in or to fund future development

* Management wants to accelerate growth though a stock market listing

What are the exit options?

The routes you might consider are:

* A sale to either a trade or financial buyer

* A management buy-out or buy-in, possibly retaining a minority stake

* A flotation on the London Stock Exchange, Alternative Investment Market or an overseas market

* A refinancing involving an injection of private equity

* A company buy-back of some share capital

What is the process?

In conjunction with a financial adviser, firms need to perform an exit strategy review. The stages are typically as follows:

1. Understand and review the business and future projects with the management team

2. Identify the preferred objectives and timescale of the principal shareholders

3. Identify any obstacles or conflicts which could frustrate or delay an exit, or impact on value

4. Evaluate alternative exit routes and the tax implications

5. The adviser will recommend a ‘grooming’ programme and timing for the exit route

6. Both parties should review progress at appropriate intervals, fine-tuning any grooming and then pursue the chosen exit strategy.