Here is a question that separates agency owners who build wealth from those who do not: what is your exit strategy?
Most people I talk to do not have one. They have a vague idea that someday they will sell. Or hand it to a family member. Or just keep going until they cannot. None of those are strategies. They are hopes.
I ran my creative agency for 13 years before I exited. And the exit strategy I ended up with was not the one I thought I would use when I started. My plan changed as the business grew, as the market shifted, and as I got clearer on what I actually wanted from the outcome.
What did not change was having a strategy. Because every decision you make in your business either increases or decreases your exit value. Whether you are selling to a trade buyer, doing a management buyout, or building a business that runs without you so you can step back on your own terms. The strategy shapes the decisions.
This guide covers the six main exit strategies available to UK agency and service business owners, how to choose between them, and when to start planning. If you want the full step-by-step process of how to sell your agency, I have written a separate guide for that.
Why You Need an Exit Strategy (Even If You Are Not Leaving)
An exit strategy is not a retirement plan. It is a framework for building a valuable, independent business.
The things that make your agency attractive to a buyer (recurring revenue, a strong team, documented systems, healthy margins) are the same things that make it a better business to run. An exit strategy does not mean you are leaving. It means you are building something that could function without you.
I have worked with agency owners who have no intention of selling in the next five years. They still go through the exit planning process. Because the result is always the same: a more profitable, less stressful business that does not depend on them for every decision.
Scaling a business that cannot be sold is just building a more stressful job. An exit strategy protects you from that.
The 6 Types of Business Exit Strategy
1. Trade Sale (Selling to Another Company)
This is the most common exit for creative and digital agencies. A larger agency, a holding company, or a competitor acquires your business. They want your clients, your team, your niche expertise, or your recurring revenue.
How it works: You sell the shares or assets of your business to the buyer. Price is typically based on a multiple of adjusted EBITDA (usually 3x to 6x for UK agencies). Most deals include an earnout: a portion of the price paid over 12 to 24 months, contingent on hitting performance targets.
Best for: Agency owners who want to exit fully within 1 to 3 years. Businesses with strong teams, diversified clients, and recurring revenue.
Watch out for: Earnout clauses can be brutal. If the buyer changes strategy after the acquisition and revenue drops, your earnout shrinks. I have seen founders lose six figures this way. Get the earnout terms reviewed by an experienced M&A solicitor.
What buyers typically want to see:
- Adjusted EBITDA of £150K+ (smaller deals are possible but less common)
- No single client above 25% of revenue
- Owner not critical to day-to-day operations
- At least 12 months of clean management accounts
2. Management Buyout (MBO)
Your existing management team buys the business from you. This is increasingly popular in UK agencies, especially where the founder has built a capable senior team.
How it works: The management team typically funds the purchase through a combination of their own investment, vendor financing (you lend them part of the purchase price, repaid over time), and sometimes external debt.
Best for: Agency owners who want continuity for their team and clients. Founders who have already stepped back from daily operations and have a strong leadership layer.
Watch out for: Your team may not have the capital for a full buyout. Vendor financing means you are effectively lending them the money to buy your business, which carries risk. The valuation is often lower than a trade sale because there is no competitive tension.
The honest reality: Most agency MBOs I have seen land at 2x to 4x EBITDA. Lower than a trade sale. But the trade-off is certainty, speed, and knowing the business continues in good hands.
3. Employee Ownership Trust (EOT)
A UK-specific structure that has become increasingly popular since 2014. You sell your business to a trust that holds shares on behalf of all employees.
How it works: You sell your shares to the EOT, which is funded through the company’s future profits. The big incentive: if the sale price is at or below market value, the capital gains are completely tax-free for the seller. No Business Asset Disposal Relief cap (currently £1M). No Capital Gains Tax. The entire amount, tax-free.
Best for: Founders who care about legacy, want to reward their team, and prefer a tax-efficient exit. Especially attractive for businesses valued between £1M and £5M where the CGT savings are substantial.
Watch out for: You are typically paid over 3 to 7 years from company profits. If the business underperforms after you leave, repayment slows. It is also a complex legal structure to set up. Get specialist advice.
Why it is growing: For a £2M agency sale, the CGT saving alone could be £200K+ compared to a standard trade sale. That is significant. More agency founders are looking at EOTs as a result.
4. Acqui-Hire
A company buys your agency primarily for the team, not the business. Common in tech-adjacent creative agencies where the team has specialist skills (UX, product design, development).
How it works: The acquiring company absorbs your team into their organisation. The “sale” is often structured as a hiring package with a modest business valuation on top.
Best for: Small agencies (under 10 people) with highly skilled specialist teams. Founders who are happy to join the acquiring company or move on quickly.
Watch out for: The valuation is usually low. This is essentially a team deal with a business wrapper. If your team does not want to join the acquirer, the deal falls apart.
5. Gradual Wind-Down
You reduce your involvement over time, extract profits, and eventually close the business or let it shrink to a lifestyle operation.
How it works: You stop investing in growth. Take maximum profit distributions. Gradually reduce clients and team until the business is either closed or running as a small lifestyle operation.
Best for: Founders who have already extracted significant wealth from the business through salary and dividends. Businesses that are not sellable (founder-dependent, no recurring revenue, thin margins).
Watch out for: This is the default for agency owners who do not plan. It is not a bad outcome if it is deliberate. It is a terrible outcome if it happens because you ran out of energy and never built something sellable. The difference between choosing this path and falling into it is worth hundreds of thousands.
6. Merger
You combine your agency with another agency to create a larger, more valuable combined entity. You typically take a stake in the merged business and continue working in it.
How it works: Two agencies combine operations, clients, and teams. Ownership is split based on relative valuations. The merged entity is stronger than either agency alone, and the combined valuation multiple is usually higher.
Best for: Agency owners who want to keep working but need scale. Agencies that complement each other (e.g., one strong in branding, the other in digital). Founders who want a partial exit now with a larger exit later.
Watch out for: Culture clashes kill mergers. I have seen agencies that looked perfect on paper tear each other apart because the founders had fundamentally different values about client service, team management, or creative standards. Due diligence on culture matters as much as financials.
How to Choose the Right Exit Strategy
The right strategy depends on four things:
1. What Do You Actually Want?
Be honest with yourself. Do you want maximum cash at exit? Or do you want your team looked after? Do you want to leave completely? Or stay involved? Do you want it done in 6 months or are you happy with a 5-year transition?
Most agency founders I work with want two things: financial freedom and the knowledge that what they built continues to thrive. Those goals are not always compatible. A trade sale maximises money but the buyer might restructure. An EOT protects the team but pays you over years.
Know your priorities before you evaluate options.
2. What Is Your Business Actually Worth?
Some exit strategies require a minimum business size. Trade buyers typically want agencies doing £150K+ EBITDA. EOTs work best above £500K valuation. If your agency is smaller, an MBO or merger might be more realistic.
Get a realistic valuation. I have written a detailed guide to EBITDA multiples by industry that can help you benchmark.
3. How Exit-Ready Is the Business Today?
A trade sale requires low founder dependency, diversified clients, recurring revenue, and clean financials. If you are missing those, you either need time to fix them (18 to 24 months minimum) or you need to consider a different strategy.
The Agency Valuation I built scores agencies across four pillars: sales function, delivery function, client relationships, and strategic direction. It takes three minutes and shows you exactly where the gaps are.
4. What Is the Market Doing?
The UK M&A market for agencies runs in cycles. In 2026, the market is active. Interest rates have settled. Buyer confidence is back. Private equity firms are acquiring agency groups again. That is good news for sellers.
But the market will not always be this way. If you are thinking about a trade sale, timing matters. Starting your exit planning now means you can be ready to go to market when conditions are strongest.
When to Start Planning Your Exit Strategy
The answer is always “earlier than you think.”
For a trade sale: start 24 months before you want to complete. That gives you time to fix the structural issues and demonstrate improved performance to buyers.
For an EOT: start 12 to 18 months before. The legal structure takes time, and you will want advice from a specialist EOT advisor.
For an MBO: start with conversations now. If your senior team does not know it is an option, you have already left it too late for a smooth transition.
For all strategies: the exit planning process (building recurring revenue, reducing founder dependency, documenting systems, cleaning up financials) should be an ongoing discipline. Not something you start when you have decided to leave, but something that runs in the background from today.
The Mistakes That Destroy Exit Value
No strategy at all. The most expensive mistake. Without a strategy, you make decisions that feel right in the moment but reduce your options later. Hiring your cousin. Taking on a client that is 40% of revenue. Never documenting a single process.
Choosing based on tax alone. EOTs are tax-free, so everyone wants one. But if your business is not suited to employee ownership (small team, founder-dependent, thin margins), the tax benefit is irrelevant. Choose the strategy that fits your business and goals. Then optimise for tax.
Starting too late. You cannot build two years of recurring revenue trends in three months. You cannot extract yourself from client relationships overnight. You cannot create a management layer that does not exist. Time is the most valuable resource in exit planning. Do not waste it.
Not getting professional advice. A good M&A advisor for a trade sale. An EOT specialist for employee ownership. A corporate solicitor for any deal structure. These are not optional expenses. They are investments that protect your outcome.
Your Exit Strategy Starts Today
Every decision you make in your agency either builds exit value or erodes it. The client you take on. The person you hire. The system you build (or do not). The retainer you pitch (or do not). None of these are neutral.
You do not need to know the exact exit date. You do not even need to know which strategy you will use. But you need to start building a business that gives you options.
The agency owners I work with who exit well all have one thing in common: they started building towards exit long before they were ready to leave.
If you want to know where your agency stands today, take the Agency Valuation. It is free, it takes three minutes, and it will show you exactly what to focus on next.
Or if you would prefer a conversation, book a call. I will tell you honestly which exit strategy makes sense for your situation and what needs to happen first.
The best exits are not lucky. They are planned.