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100 Rules For Entrepreneurs by Neil Lewis

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85. Plan your exit from your business

Selling your business for £10m sounds like a great achievement. However, if you are the CEO/entrepreneur then the buyer will want to tie you in. So, sticking with the £10m example, typically a buyer would offer a £5m cash payment and then a further £5m in two years’ time, subject to the business achieving certain revenue or profit goals after sale, perhaps a doubling of revenue over the two year period.

And don’t forget, if you as the entrepreneur have given away equity in the business (a perfectly normal situation to be in) and now only have, say, a 20% stake, you can expect no more than £1m now and £1m in two years. Suddenly the headline figure is no longer so remarkable.

And you pay tax in both cases, ...

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