---
title: Business Exit Routes Explained | Stratworth Advisory
url: https://www.stratworthadvisory.com/insights/exit-routes-explained/
description: Trade sale, private equity, management buyout, employee ownership or family succession: the main business exit routes explained for UK owner-managers.
last_updated: 2026-09-29
publisher: Stratworth Advisory Ltd
---

Guide 05 · Exit routes

# Exit routes explained: the main ways to *sell, pass on or step back*

There is more than one way out of a business. A trade sale, private equity, a management buyout, an employee ownership trust, family succession or a gradual step back: each gives a different mix of price, speed, control and continuity. This guide explains the main routes for UK owner-managers, and how they compare.

- By **Stratworth Advisory**
- Published 29 September 2026
- 9 min read
- 7 sources

## Key takeaways

1. Decide what you want from the exit before you choose a route: proceeds, timing, your role, your people and your legacy.
2. The British Business Bank lists trade sales, full or partial sales to private equity, family offices, flotation, refinancing, employee ownership trusts and joint ventures.
3. Management buyouts, employee ownership and family succession keep the business with people who know it, but depend on funding and on a team ready to lead.
4. Tax treatment differs by route and changes over time, including recent changes for employee ownership trusts. Take advice early.
5. Whichever route you choose, the same preparation makes it more likely to succeed.

## Start with what you want from your exit

It is natural to start by asking what the business is worth. A better first question is what you want the exit to achieve. The answer points to a route, and the route decides which preparation matters most.

- **Proceeds.** How much you need, and whether you need all of it at completion.
- **Timing.** A clean break soon, or a gradual transition over several years.
- **Your role afterwards.** Leaving entirely, staying for a handover, keeping a stake or chairing the board.
- **Your people.** How much the future of your team and culture matters to you.
- **Legacy.** Whether the business should stay independent, stay in the family or join something larger.

In SCALE2SELL® this is Exit Worth: the route out and what it leaves you with. The founder interviewed for the British Business Bank’s [Top tips: how I exited my business](https://www.british-business-bank.co.uk/business-guidance/guidance-articles/business-essentials/top-tips-how-i-exited-my-business) puts it simply: design several exit strategies, pick one and commit to it.

Exhibit 1Who takes over: the main routes at a glance

Your business

1.

Sell to an outside buyer

  - Trade sale
  - Private equity
  - Family office or individual
  - Flotation

2.

Sell to people inside

  - Management buyout
  - Employee ownership trust

3.

Pass it on

  - The next generation

4.

Keep it, step back

  - Refinancing
  - Stepping back

Select a route to read about it. Grouped by who owns the business next, from the British Business Bank’s list of exit routes plus management buyouts, family succession and stepping back.

## Trade sale

A trade sale is the sale of the business to another company: often a competitor, a supplier, a customer or a larger group moving into your market. It is the route most people picture when they think of selling.

Trade buyers often value strategic fit: customers, capabilities, locations or people that suit their own plans. The British Business Bank’s guide to [selling your business](https://www.british-business-bank.co.uk/business-guidance/guidance-articles/business-essentials/selling-your-business) quotes two M&A practitioners who describe a trade sale as offering the greatest prospect of a full cash exit and the opportunity to leave the business, particularly where the buyer will absorb it into its own organisation. They add that due diligence is typically less onerous than in a private equity transaction.

Not all of the price is always paid on completion. Part of it may be deferred, or linked to how the business performs after the sale, an arrangement often called an earn-out. That can bridge a gap between what you want and what a buyer will pay up front, but it also ties part of your outcome to decisions the new owner makes. Take advice on the terms before you agree them.

The trade-offs are control and continuity. Once the business is absorbed, its name, culture and structure may change, and you will usually be asked to support a handover period.

## Private equity: a full or partial sale

Private equity firms invest in established businesses with the aim of growing them and selling their stake later. The British Business Bank’s guide to [private equity](https://www.british-business-bank.co.uk/business-guidance/guidance-articles/finance/private-equity) explains that a private equity firm will take a large or controlling stake, and that firms typically aim to hold their investments for four to seven years before seeking to sell.

For a founder, a private equity deal is often a partial exit. The British Business Bank notes that a transaction with a private equity house will often involve a partial sale, because management shareholders are typically asked to reinvest a proportion of their sale proceeds. You take some money out, stay involved, and share in a later sale if the business grows.

It suits founders who want to reduce their personal risk while backing further growth, and it depends on a strong management team and a credible growth plan. Our work on [investor readiness](https://www.stratworthadvisory.com/investor-readiness/) covers that preparation.

## Management buyout (and buy-in)

In a management buyout, the existing management team buys the business. In a management buy-in, an outside team does the same. The attraction is continuity: the buyers already know the business, its customers and its people, and the transition can be gentler than a sale to a stranger.

The challenge is usually funding. Managers rarely have enough capital to buy a business outright, so buyouts are typically funded by a combination of the managers’ own money, lenders, investors and payments to the seller spread over time. The British Business Bank notes that private equity is commonly used to support management buyouts and buy-ins of established companies.

A buyout also depends on managers who want to own the business, not just run it. That is a leadership question long before it is a funding one: see [Team & Leadership](https://www.stratworthadvisory.com/scale2sell/team-leadership/). Our guide [Management buyouts explained](https://www.stratworthadvisory.com/insights/management-buyout-explained/) covers the route in depth, from funding to the stages of a deal.

### Questions to ask before a buyout

- Do your managers want to own the business, and to carry the risk that comes with it?
- Can the business support the funding, including any payments to you spread over time?
- How will you be paid, and what protection do you have if the business struggles?
- What role, if any, will you keep, and for how long?

## Employee ownership trust

An employee ownership trust, or EOT, is a way of selling the business to its employees collectively. HMRC describes an EOT as a special type of trust set up to hold a controlling interest in a trading company for the benefit of the company’s employees. Employees do not usually buy shares individually; the trust holds them on their behalf.

An EOT can appeal to founders who want to protect the business’s independence and culture and reward the people who helped build it. Because the trust is often funded over time from the company’s future profits, the route depends on steady profits and on a leadership team that can run the business without the founder.

The tax treatment is specific and has changed recently. HMRC’s [HS277 helpsheet](https://www.gov.uk/government/publications/employee-ownership-trusts-and-capital-gains-tax-self-assessment-helpsheet-hs277) and [Capital Gains Manual](https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg67800) set out the current rules. Do not rely on older articles. The [Employee Ownership Association](https://employeeownership.co.uk/) is the UK membership body for employee-owned businesses and their advisers.

Take tax advice early

Tax treatment differs by route and changes over time. We do not state rates or reliefs. Take advice from your tax adviser before choosing a route.

## Passing the business to the next generation

Family succession keeps the business in the family, and for some founders that is the whole point. It is also the most personal route, because it combines business decisions with family ones.

- **Is the successor ready, and willing?** Capability and appetite both matter. A successor who has earned the respect of the team starts from a far stronger position.
- **Fairness.** Treating children equally does not always mean giving each the same share of the business, particularly when only some of them work in it.
- **Your income.** How you will be provided for if you are not selling for cash.
- **Governance.** How decisions will be made once ownership is shared, and what happens if family members disagree.
- **Tax.** Passing on business assets has tax consequences. GOV.UK’s guide to [Business Relief for Inheritance Tax](https://www.gov.uk/business-relief-inheritance-tax) is a starting point; take advice early.

Many of the same questions arise when handing over to a management team. Our [succession planning for family and management exits](https://www.stratworthadvisory.com/succession-planning/) work covers both, and [Exit planning vs succession planning](https://www.stratworthadvisory.com/insights/exit-planning-vs-succession-planning/) explains how the two plans fit together.

## Other routes: family office, flotation, refinancing

The British Business Bank lists several less common routes:

- **A family office or a high net worth individual.** Similar in many respects to a private equity transaction.
- **A flotation.** Listing on a stock market can allow a full or partial exit. It is usually practical only for larger businesses, and it brings significant cost and continuing obligations.
- **Refinancing.** The business takes on bank debt supported by its profits and returns the proceeds to shareholders through a share buy-back. You keep ownership but release some capital.
- **A joint venture.** Not a sale in itself, but a partnership that can lead to other exit routes, such as a trade sale.

## Stepping back without selling

Some founders do not want to sell at all, at least not yet. They want the business to keep rewarding them while they do less of the day-to-day work. That can mean appointing a managing director, moving to a chair or non-executive role, and being rewarded as an owner rather than as the person who runs everything.

It is a legitimate exit of a kind, and it rests on exactly the same foundations as a sale: a business that runs without you, a strong leadership team and reliable numbers. It also keeps every other route open for later. See [How to make your business less dependent on you](https://www.stratworthadvisory.com/insights/reduce-owner-dependency/).

## Comparing the routes: price, speed, control, continuity and complexity

The table compares the five most common routes in general terms. It is a starting point for thinking, not a verdict on your business: every deal is different, and the right route depends on your goals, your team and your market.

Exhibit 2The main routes compared

| | Who takes over | Your role afterwards | Continuity for staff and culture | What it depends on | Complexity |
|---|---|---|---|---|---|
| Trade sale | Another company, often in your sector | Usually a handover period, then you leave | Depends on the buyer’s plans for integration | A buyer who sees strategic value | Full due diligence by the buyer |
| Private equity | An investment firm, alongside management | Often you stay on and reinvest part of the proceeds | Management usually stays; a later sale is expected | Growth potential and a strong management team | Detailed due diligence and investment terms |
| Management buyout | Your existing managers | A handover to people you know | High: the people who run it become the owners | Funding, and managers who want to own the business | Funding can add time and structure |
| Employee ownership trust | A trust, for the benefit of all employees | Agreed as part of the transition | High: ownership passes to the workforce collectively | Steady profits and a leadership team without you | Specific legal and tax conditions |
| Family succession | The next generation of your family | Often gradual, over years | High, if the successor is ready | A capable, willing successor and fairness across the family | Tax, fairness and governance questions |

General characteristics only. Every transaction differs; take professional advice on your circumstances.

Choose a preferred route and commit to it, as the British Business Bank founder suggests, but prepare in a way that keeps a second option open. Buyers, markets and personal circumstances all change.

## Getting ready, whichever route you choose

The routes differ, but the preparation overlaps almost completely. Every buyer, investor or successor will want reliable numbers, a business that does not depend on one person or one customer, a capable team, clean legal housekeeping and a clear plan.

- [How to prepare a business for sale](https://www.stratworthadvisory.com/insights/how-to-prepare-a-business-for-sale/) sets out the full preparation plan.
- [How long does it take to sell a business?](https://www.stratworthadvisory.com/insights/how-long-does-it-take-to-sell-a-business/) explains the stages of a sale and what slows it down.
- The [Exit Readiness](https://www.stratworthadvisory.com/scale2sell/exit-readiness/) pillar turns your preferred route into a plan, and [Financial Clarity & Drivers](https://www.stratworthadvisory.com/scale2sell/financial-clarity/) makes sure the numbers support it.

[Related SCALE2SELL® pillar 08 of 08**Exit Readiness**The preparation and structure for a future sale, exit or succession.Exit Readiness in detail](https://www.stratworthadvisory.com/scale2sell/exit-readiness/)

To talk through your options, [book a complimentary Founder Conversation with Nik](https://www.stratworthadvisory.com/contact/), or [score your business with the free Readiness Assessment](https://www.stratworthadvisory.com/readiness-assessment/).

## Sources

1. [British Business Bank: Top tips, how I exited my business](https://www.british-business-bank.co.uk/business-guidance/guidance-articles/business-essentials/top-tips-how-i-exited-my-business)british-business-bank.co.uk
2. [British Business Bank: Selling your business](https://www.british-business-bank.co.uk/business-guidance/guidance-articles/business-essentials/selling-your-business)british-business-bank.co.uk
3. [British Business Bank: Private equity](https://www.british-business-bank.co.uk/business-guidance/guidance-articles/finance/private-equity)british-business-bank.co.uk
4. [HMRC: Employee Ownership Trusts and Capital Gains Tax (HS277)](https://www.gov.uk/government/publications/employee-ownership-trusts-and-capital-gains-tax-self-assessment-helpsheet-hs277)gov.uk
5. [HMRC Capital Gains Manual: employee-ownership trusts (CG67800)](https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg67800)gov.uk
6. [Employee Ownership Association](https://employeeownership.co.uk/)employeeownership.co.uk
7. [GOV.UK: Business Relief for Inheritance Tax](https://www.gov.uk/business-relief-inheritance-tax)gov.uk

All sources checked in September 2026. We cite only authoritative UK sources, and leave out any figure we cannot source.

**About this guide.** Written by Stratworth Advisory. Published 29 September 2026; last updated 29 September 2026. It is general information for UK business owners, not advice on your circumstances.

Stratworth Advisory provides strategic business guidance only and does not offer regulated financial, legal or investment advice. Clients should seek independent professional advice where appropriate.

Next step

## Talk your route through with someone *who has taken one.*

Nik Spencer’s 3 successful business exits were sales to Biffa PLC, PFB and Kier PLC. Book a complimentary Founder Conversation, or start with the free SCALE2SELL® Readiness Assessment.

[Take the free Readiness Assessment](https://www.stratworthadvisory.com/readiness-assessment/)

[Book a complimentary Founder Conversation with Nik](https://www.stratworthadvisory.com/contact/)

Complimentary and confidential.

Keep reading

## More guides *for founders*

[All guides](https://www.stratworthadvisory.com/insights/)

Guide 01 · 12 min read

### [How to prepare a business for sale: a guide for founders](https://www.stratworthadvisory.com/insights/how-to-prepare-a-business-for-sale/)

Guide 06 · 9 min read

### [How long does it take to sell a business?](https://www.stratworthadvisory.com/insights/how-long-does-it-take-to-sell-a-business/)

Guide 03 · 9 min read

### [How to make your business less dependent on you](https://www.stratworthadvisory.com/insights/reduce-owner-dependency/)

### Related SCALE2SELL® pillars

1. [01 Vision & Value](https://www.stratworthadvisory.com/scale2sell/vision-value/)
2. [05 Team & Leadership](https://www.stratworthadvisory.com/scale2sell/team-leadership/)
3. [08 Exit Readiness](https://www.stratworthadvisory.com/scale2sell/exit-readiness/)

Related service[Succession planning](https://www.stratworthadvisory.com/succession-planning/)

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Stratworth Advisory provides strategic business guidance only and does not offer regulated financial, legal or investment advice. Clients should seek independent professional advice where appropriate.

Contact: nik@stratworthadvisory.com. Book a complimentary Founder Conversation: https://www.stratworthadvisory.com/contact/