If Wales wants to scale its economy, it needs to get better at how businesses exit, not just how they start.
The insights in this column are informed by Menzies’ white paper, Exit Routes Explained: Making the Right Decision for You and Your Business, which looks at how business owners can approach exit planning with greater clarity and confidence.
For years, the focus of economic policy and business support has rightly centred on entrepreneurship: helping people start businesses, access funding, and grow. Measures of success often focus on job creation in new or growing businesses. Far less attention has been paid to what happens at the other end of the journey. And yet, exit is one of the most critical and overlooked moments in the lifecycle of a business, not just for the owner, but for the wider economy.
Across Wales, thousands of SMEs will change hands over the next decade. Many are owner-managed businesses built over many years, often with deep roots in their communities. These transitions represent a huge opportunity: to recycle capital, strengthen leadership, and drive the next phase of growth. But they also carry significant risk. When exit planning is done poorly or is left too late, the consequences extend far beyond the individual business.
At its core, exit planning is not just a financial or personal decision. It is a structural economic issue, affecting succession, productivity, and the long-term resilience of businesses.
When an exit has not been planned properly, due diligence by the proposed buyer may raise issues which ultimately cause the proposed transaction to be derailed. The impact can be immediate and tangible. A failed or delayed deal creates uncertainty for employees, customers, and suppliers. In some cases, businesses that could have continued successfully under new ownership instead stagnate or decline. This in turn makes the business less attractive to a purchaser or funder and makes it harder to achieve the exit you want.
This is where exit planning becomes an economic issue, not just a business one.
Well-executed exits play a vital role in healthy economies. They enable the recycling of capital, freeing up wealth that can be redeployed into new businesses, innovation, or investment. They support leadership renewal, allowing the next generation of managers or entrepreneurs to step forward. And they help ensure that strong businesses continue to grow, rather than falter at the point of transition.
Poorly executed exits do the opposite. They trap value, disrupt continuity, and weaken the very foundations that growth depends on. Business failure may well be the ultimate endpoint.
In Wales, where the economy is heavily reliant on SMEs and family-owned firms, this challenge is particularly acute. Many of these businesses face complex succession questions, often involving a mix of financial, operational, and emotional considerations. Passing a business to the next generation, for example, may feel like the natural choice, but without proper planning and tacking difficult conversations, it can create financial strain, leadership gaps, or even conflict. Similarly, a trade sale might deliver immediate value, but at the cost of local control, jobs, or long-term strategic direction.
The key point is that there is no single “right” exit route. The right outcome depends on the specific business, the owner’s goals, and the readiness of the organisation. But what is consistently clear is that early, strategic planning leads to better outcomes—not just for owners, but for the wider economy.
Effective exit planning should begin years before any transaction is contemplated. It involves building a business that can operate independently of its founder, strengthening governance and reporting, developing leadership capability, and ensuring financial and tax structures are fit for purpose. These steps don’t just make a business easier to sell—they make it more productive, more resilient, and more valuable in the process.
In other words, exit-ready businesses are better businesses.
For business owners, the message is clear. Exit is not something to think about later. It is something to plan for early, strategically, and with a clear understanding of the options available. Leaving it too late doesn’t just limit choices; it can fundamentally undermine the outcome.
There is also a broader policy implication here. If Wales is serious about improving productivity and scaling its economy, then exit planning needs to be part of the conversation. That means supporting business owners not just at the start of their journey, but throughout it, including the final transition. It means encouraging earlier engagement with adviseors, improving awareness of different exit routes, and recognising the role that well-managed transitions play in sustaining economic momentum.
Focus in this area has a direct impact on growth. Every time an owner is coached on how to plan for and approach their exit from the business, there is potential to unlock value for the economy and create a better outcome.
Every poorly planned exit represents a missed opportunity to retain value, protect jobs, and reinvest in future growth. A well-executed exit, by contrast, strengthens the economic fabric, creating a cycle of renewal that benefits businesses, communities, and the wider economy.
If we want to build a more resilient, productive, and ambitious Welsh economy, we need to look beyond how businesses start and grow. We need to focus just as much on how they transition and how they end.
We have recently welcomed a newly formed government into the Senedd, and a priority should be consideration of the full business lifecycle, to enhance productivity and ultimately make Wales a better place to live and work.
