Selling your agency, might be something that you haven’t even started thinking about, retiring, maybe even less so.

But, an exit strategy is something that we should all be planning along with all the other elements of building our agencies.

But where to even start? We were lucky enough to speak to Jonathan Leafe, MD of Leafe Consultancy and author of “I’m an Agency Owner, Get Me Out of Here!” who has already been through the process and has boiled the whole thing down into six stages.

I sold my business to a management buyout three years ago. And since then, I’ve been consulting with other agencies and I use this as a pillar of my consulting piece because not only is it a good thing to think about it, sort of gets people thinking: “I’m working hard, what’s in it for me? What’s the end game? What does the end of my journey look like and how can I enjoy it while I’m doing it as well?

I’ve found in my experience most agencies do not have a long-term plan. They definitely don’t have a wealth plan. They tend to live in the now, and if they’ve had a good year, they take more money out.

And if they’ve had a bad year, they don’t, they’re not hand to mouth, but they are a little bit more short-term thinking, when it comes to planning their wealth and also the succession plan, who is actually going to take over in the agency after you’ve gone? Or who can do it if you get run over by a bus, or who can do it if you want to take three weeks off or four weeks off?

I managed to take four weeks off every year for the last five years of my agency, which was absolutely great financially.

Even if you have that exit plan, you don’t execute it, it’s actually a good thing to have. It’s up to you. You know it puts you in control of the agency, and as a business owner you should be in control of it.

I’ve boiled it down into just six moves:

  1. Where you are today?
  2. What your operation looks like
  3. How much money do you need to live on?
  4. Who will take over from me
  5. How will the exit work?
  6. The exit

Where you are today?

Stage one is absolutely nailing down exactly where you are in terms of your financials – income, costs, tax etc

It’s a really powerful thing to do because it just gives you an idea of exactly how your business is performing, and then you can decide moving forward how you plan your business alongside these keys.

What your operation looks like

Get the key positions in your organisation. Often when businesses start, there are five hats really, but everybody starts a business wearing all five hats, and over time they start to give those hats away as the team grows bigger.

And that’s absolutely essential, I think you’ve you’ve you’ve got to really to execute this properly. You’ve probably got to have a team which is around 5 to 15 to 20 to 25 people. Smaller than that, you’re still a micro business or a freelance agency.

How much money do you need to live on?

From a personal perspective, when you start this journey, you’ve got to find out actually how much you need to live on, where you are with that and what is your current financial situation.

It’s your outgoings. It’s your mortgage, it’s your savings. It’s your pension fund and it’s the shareholders’ funds actually in your business as well.

Who will take over from me?

You may already have in mind who you want to take over, but it is also something that you can plan for.

But now there are very good schemes called the EMI scheme that some of you will be familiar with it, so it stands for the enterprise management initiative. It’s a government scheme. It’s very tax-efficient to to get people involved in the business.

Get the timeline discussed: it’s definitely doable in 10 and 15 years, everybody could do.

But it does mean also you’ve got to make the business bulletproof. So however you’re growing your business, you’ve got to do it in such a way that there aren’t any surprises.

How will the exit work?

You built up some funds in your pension. You started to pay off your main debt, which is your mortgage and your savings probably just were where they were originally. Because you still only need that for a rainy day.

So, how will the exit actually happen? The exit plan’s pre-agreed, your company repurchases the shares from you.

And at the moment in time at this moment in time, the government might change this. Of course, you only pay 10% tax on the the amount of money that you get from selling your shares instead of the normal tax rate, which would be sort of 19% on that. So, it’s a big saving.

The remaining shareholders might have to invest more capital just for working capital purposes.

The Exit

What will you do at the end of the afterwards? Consultant or a non-exec director? New business venture?

Potentially, write your memoirs or just retire and sail off into the sunset. These are all things that you could do.

You can have up to £1,000,000 in your pension and under Government rules and you can take that when you like.

You’ve got your home completely paid off and your savings now are absolutely full from the cash of the business business equity.

That’s the ideal scenario. Not everybody can do the same thing as that, but if you achieve half of that, you’ll be in a good position.

You do a third of this it’s probably better than where you are today, but if you do the whole thing, it’s an absolutely fantastic position to be in. And even if you don’t sell the business, your pension’s full, your debts are paid off and you’ve got the equity left in the business. You’re in a really strong position to get people in the right places in the business and make it completely self-running and you can just dip in and out as you wish to do so, and a lot of people will do that, or to sail off into the sunset.



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Jonathan leafe

Since selling his agency in 2017, Jonathan has gone on to coach over 40 agencies with great success.

Focussing on getting the very best out of the agency and the owners. He takes them through a journey of understanding who they are and what they need to do to achieve success.

His book “I’m an agency owner get me out of here” has received critical acclaim and is a go-to book for any agency owner