Life after exit - the next chapter

When Sahar decided to leave her business, she had mixed feelings. "Back then, the thinking at the time was that as an entrepreneur you had a sell-by date. So, once the entrepreneurial phase was over you'd let the grown-ups come in as it needed to be a big mature company. No one told us otherwise."

The day after selling her company, the last thing Sahar and her brother felt like doing was celebrating the loss of a business they were both so passionate about. "We loved what we did and the business we'd started. It takes so long to build something brick by brick with your sweat and tears. Then, with one signature, this wonderful thing you had in your life just wasn't there anymore."

Planning ahead

But it doesn't have to be like that. Russell Prior, HSBC Private Banking's Head of Family Governance and Family Enterprise Succession, says that putting together a well-thought-out plan is a vital part of an effective exit strategy.

Apart from the practical challenge of generating and maintaining a model that is ultimately worth selling on, business exit scenarios come with a significant emotional impact that many owners underestimate. For family businesses with a long history, this impact is even more highly charged.

‘Entrepreneurs who have spent every waking hour building and running their business often forget to step back and think about the long-term vision for themselves and their wealth before embarking on a sale. And it's worse if they are acting under pressure.'

He points out that business owners often have more to think about than they realise. ‘It's important that they ask themselves what they want their and their family's futures to look like. Then they need to clarify and set objectives for achieving this. An entrepreneur planning to sell their business and secure their wealth for the future can only really do so when they understand what they want to do next.'

The benefit of hindsight

Looking back at her decision now, Sahar says she would have done things differently. Instead of selling the business, she might have taken a holiday - "it's normal for entrepreneurs to get quite tired" - and then hired a professional CEO to give the business a different perspective.

She explains that as a company changes and evolves it needs people who can bring different skills and disciplines to the table, while also appreciating the entrepreneur's heart and soul within the business. "My advice to other entrepreneurs is to keep your voice in the business because the business needs it. In these times of huge change, it's important to have this consistency. The key thing I've learnt is not to rush the exit process. I've seen so many entrepreneurs who've had enough and just want to sell. Instead of doing a full exit I'd suggest they take some time off."

If you're thinking of selling on your business, come and talk to us. At HSBC Private Banking, we can help you draw up a robust plan to make sure your personal interests, and future wealth, are at the very heart of your exit strategy.