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Exiting your business – what you should know (including how to maximise profit!) … by Simon Lester

Planning a successful exit … or put another way “Taking the fastest route to the biggest profit with the least resistance!”

Simon Lester

Simon Lester - Board Director and Academy Chairman

Most business owners have plans to exit their business at some point and there are many elements that combine to ensure a successful exit. Grooming the business for sales is obviously paramount, but in this article we are going to look at the execution of the deal itself by way of a number of thought-provoking questions that only you can answer:

Different Options

Decide whether your best route is via a trade sale, flotation, a merger, or some kind of management buy-out. If it’s a trade sale, will it be to a competitor or a diversifier, the latter often paying more! If it’s a flotation, have a big budget for fees and decide what you want your future role to be, if anything! With an MBO, is there sufficient in-house expertise to take over, are you expendable?

The Valuation

A track record of growing profits is by no means the only measure of value. Have you developed a brand or market-leading position? Do you have an attractive client base on which to leverage future sales of other products? Are there attractive assets such as IT or property with development potential? Is there synergy with a target buyer?


Always critical in any deal. Have you done your tax planning? Is the trading performance showing a growing trend in sales and profitability? Do you have any outstanding disputes or minority shareholders that could scupper the deal? Buyers hate surprises so deal with this first.

Due Diligence

This is the buyer’s opportunity to chip the price so here’s my top tip: employ a friendly accountant to come in and do the due diligence on your first. Any ‘skeletons in the cupboard’ will be exposed and dealt with before the buyer finds out and uses them as an opportunity to chip the price.

The Negotiation Process

Do your research on the buyer and know exactly who you’re dealing with. Decide beforehand if you want a future role and use a skilled 3rd party to negotiate on your behalf. You will be emotionally involved and therefore the least suitable person to negotiate the deal!

Other Considerations

There are many but here’s a few: Ask for a non-refundable deposit before you start the negotiation process, this will weed out speculators. Lock in key executives with Service Agreements and Executive Share Option programs (ESOPS) before you start, transfer out IP & property to another company if this is non-core, remove all owner extravagancies from the business and bring your pension contributions up-to-date as these are legitimate profit add-backs.


-Spend time on preparing the Information Memorandum

-Regard anything beyond the initial payment as a bonus

-Hold your ground!


-Give unlimited warranties or personal guarantees

-Accept full payment in shares or in the earn out

-Cave in!

And Finally…

Remember that the best time to sell…………….is when you don’t have to!


Board Director and Chairman, Group 7
Academy for Chief Executives Ltd

Having “walked the talk” as a member for the last 8 years Simon Lester is well qualified to be an Academy chairman. During his time with the Academy, Simon has completed a MBO of a family business, started and sold a travel management company and built up an impressive list of property and hotel based businesses. Lately, Simon has been the Chairman of his own Hotel Management consultancy helping major hotel groups globally to develop their business.   He became a Board Director of the Academy for Chief Executives in January 2011.

Once described as a “serial entrepreneur” Simon is married with 3 children, lives in north London and has an active interest in aviation, motor sport and yachting in his spare time.

He describes his experiences in the Academy as life changing and intends to make sure that his members experience the same. Simon passionately believes in developing businesses through people, but is also a “tactical marketer” who believes in the philosophy that people should work smarter not harder. Simon’s Academy meetings are conducted in a serious but lighthearted manner, as he believes that learning should be fun. Members should not however, expect to sit in their comfort zone for too long!

To find out more about joining Simon’s group, visit

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