Personal Finance | 30 November 2023
Making the most of your career’s defining moment – the art of the business exit
The head of our Business Exit Programme, Greg Kyle-Langley, details how advice and guidance at the crucial moment of exit could provide lifelong value.
In the decade I’ve spent supporting the growth journeys of entrepreneurs, CEOs and founders, the business exit has always been such an important moment. As private bankers we are in a privileged position, working closely with our clients through what can be genuinely life changing moments. These are deals which can lead to prosperity and purpose for the rest of your life – they’re not worth getting wrong.
That’s why we’ve brought together all our experience of working through these moments to create a knowledge centre for clients, making sure they’re as prepared as they can be when it comes to a business exit. These are lessons and elemental truths we’ve discovered, and share, so clients don’t have find out the hard lessons on their own. A generation ago it might have been a conversation over lunch and the sharing of some anecdotes – today we’re able to offer a comprehensive exit service and professional introductions to optimise value and opportunities for clients approaching this key moment.
What’s the difference between a good exit and great exit?
It’s your life’s work and you deserve to be rewarded. The experience of one client is a powerful illustration of why it pays to invest time and money on experts to help guide your exit. They owned a luxury travel firm and hoped to achieve a buyout valuation similar to peer companies that were valued at around 6-8x earnings on the stock exchange.
The corporate financial consultants we introduced them to were able to view the company as the missing piece in a buyer’s puzzle – meaning they understood what else the travel firm could be. They explained to the owner that their company was really a luxury services business with unique access to a market of high net worth consumers and with massive potential for the cross-selling of high-end goods and services. They spent the next 18 months reorientating the business around these services before taking the business to auction. Two of the world’s largest luxury conglomerates started a bidding war before both lost out to a private equity group – the sale was the record earnings to value multiple ever achieved in the sector.
When should you start planning?
Generally, the earlier the better. At least two years before you complete the transaction is great but there are some entrepreneurs we’ve worked with through NatWest Accelerator who, even though they’re just transitioning from the startup stage, are already thinking about an exit process. That can be really powerful when talking to investors because it shows they’re thinking about value drivers and are also aware of the risk mindset buyers might have.
How we help you get there
The first thing we’re able to offer clients is objective knowledge sharing. It’s likely they won’t have been through the process before and there’s often a reticence in discussing it – they might not want to jinx it or may not want to hear contrasting ideas of value. Understandably, clients also feel they know their sector inside out and don’t need any external input.
However, our research has categorically shown that working with the right advisers can be a major differentiator – both for your business and for you personally. We’ll make sure you work with someone who understands your business and your goals for exit but who can also challenge you to think like a buyer. This won’t be like giving your house a lick of paint before you sell it – adding real value may mean building an extension or even repurposing the entire building.
Advisers can also bring the right closure for you as a business founder or owner – helping you appreciate that while your exit may be the end for you, it’s not for your business. Your success so far, and handing the firm on to new owners, will help it grow to the next level.
Finally, we’ll help you understand the importance of the right legal advice. You’ll need corporate lawyers to help negotiate any potential earnout scenarios and be there to advise you on what will happen if something unexpected happens. We know this is the time to use real experts who specialise in these transitions – it’s not usually a role that can be covered by your inhouse team.
“These are deals which can lead to prosperity and purpose for the rest of your life – they’re not worth getting wrong.”
Greg Kyle-Langley, Head of Business Exit Programme at Coutts
Life after exit
Perhaps the thing we hear most often from clients for who we’ve managed a successful exit is: ‘I wasn’t prepared for this’. It’s very, very rare that there’s a real clean-break champagne popping moment. Often there might be an earnout requiring you to work on through a transition period. Once clients do leave for good, they might go from a hundred miles an hour to a stasis that can feel purposeless.
Receiving a large amount of money can also create challenges for you and your family – how do you prepare them? Who will inherit and how once you’re gone? How should the money be put to use and ultimately what is it for?
These are the most important questions clients need to address and that is why we ask them at the very beginning of the business exit process – not only to guide their goals but also to make sure they’re prepared for life after exit. Beyond financial reward, a successful exit should be the launch pad for the next chapter in your life story.
For so many of our clients, their business is their model for interacting with and adding to the world. Walking away from that should never be easy – but when that moment comes it’s only right that it happens in the best way possible, opening more doors and defining everything a good reward should be.
For that next part of your journey we’re here too. Whether you’re looking to become more involved with philanthropy, plan how to use your wealth to benefit your family or invest in your next venture – we have a suite of services designed around your needs.
The challenges and opportunities our clients face continues to drive us as we share and support their journeys – get in touch to find out more about our private service for entrepreneurs and business leaders.
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