How to Structure a Business Exit Plan

Don’t rush into selling; ask yourself these questions instead. 1. Are all your co-founders actually aligned on selling? This seems obvious, but it's not. Maybe you're ready to move on to the next thing. Maybe your co-founder has nowhere else to go if this company fails. I've watched deals blow up because founders assumed everyone wanted the same outcome. Have the hard conversation now, not during due diligence. 2. What's your walk-away number? "I'm willing to sell at the right price" isn't a strategy. It's wishful thinking. You need a specific number. Below this, you keep building. Above this, you sell. No gray area. And don’t forget to consider taxes in your numbers. 3. Can your business actually run without you? I hear this claim constantly: "The business is totally functional without me." Then I dig deeper. You're still fixing bugs on weekends. You know the codebase better than anyone. You handle the big customer calls. Founders do work they don't consider "work." Acquirers see right through this. 4. Are your investors on the same page? Your angel investors backed you to build a billion-dollar company. Now you want to sell for $2M. That's going to be an awkward email. Get them aligned before you start acquisition conversations. They have to sign off on the deal anyway. 5. Why would anyone actually want to acquire you? Most founders approach this backwards. They think about what they want to get paid, not what value they're providing. Are you a threat? Do you solve a strategic priority? Can they cross-sell your product? Or are you just hoping someone wants to buy revenue? The "why" determines the "how much." 6. What happens if you can't sell? This is the question nobody wants to answer. If no acquisition materializes in the next 12 months, are you committed to keep building? Or will you shut down? Your answer reveals whether selling is the right strategy or just an escape plan. 7. How much of your payout depends on you staying? Here's the hard truth: Most acquirers won't pay you millions to walk away immediately. If your business needs you to survive, expect earnouts. Expect retention requirements. Expect to work for the acquiring company longer than you want. Founders who answer these questions honestly before starting acquisition conversations get better outcomes. It significantly shortens the time to exit. And remember, "time kills all deals." Founders who wing it end up in month-long negotiations that go nowhere. The founders who know exactly why they're selling, what they want, and what they're willing to do post-acquisition close deals faster and at better terms. The founders who are "just exploring options" waste everyone's time. Acquisitions can fail for many reasons, but they are doomed to fail if you jump into them unprepared. You will make wrong decisions at every step of the process. That's why most acquisition attempts fail.

You spent years preparing to sell your business. But how much time did you spend preparing for what comes after? I can’t tell you how many founders say the same thing after the wire hits: “I wish I had built a better team around me before I closed.” Because here’s what happens: You go from having purpose, momentum, identity— To waking up with a large bank balance… and no clear direction. That’s when the cracks show: – Missed tax windows – Conflicting advice – Blind trust in the wrong people – Or worse: paralysis The best exits aren’t just financial wins. They’re smooth transitions into what’s next. And that takes a personal post-exit team. ▸ Wealth Advisor (but not just any) You need someone who understands liquidity events—not just retirement plans. They should ask about your goals, investments, and legacy—not just pitch products. ▸ Tax Strategist (before and after the deal) They should already be at the table when the LOI is signed. Their job: structure the deal, minimize capital gains, and map out Year 1 planning. ▸ Attorney (who stays post-close) Post-exit legal work doesn’t stop. Earn-outs, trust structuring, estate plans—they need ongoing M&A fluency. Optional—but often game-changing: ◦ A performance coach or therapist – for the identity shift. ◦ A philanthropic advisor – if giving back matters. ◦ A family governance expert – if you’re planning wealth transfer. 🚩 Red flag: If an advisor pitches a product before understanding your goals—walk away. Trust is built before the money moves. You don’t assemble your dream team when you’re tired, emotional, and post-close. You build it when you’re clear-headed—before the deal is done. → Want to make sure you're preparing for all sides of your exit? The Sellability Checklist includes the key people, prep questions, and blind spots to cover in advance. (Link in first comment.) #ExitPlanning #Founders #WealthManagement #TaxPlanning #PostExit #SellSide #MergersAndAcquisitions #FounderLife #Entrepreneurship

It isn't all sunshine and rainbows in our business. Last month, we lost a potential $20M client. We could have let it crush us, but instead, we used it to grow. Our team walked through EXACTLY how we would help him if he hired us. Here's what we would do: 1. Goal setting → Lay out his personal, financial, and business goals. → This includes timeline, financial needs, and legacy considerations. 2. Create the baseline → Get a current valuation of the business. → Identify the assets needed to produce the post-exit income needed. → Assess if the business's current value will fill the gap of total assets needed. 3. Identify opportunity → Mitigate risks that could impact the business's value. → Improve upon the weaknesses within the business today. → Create a detailed plan to improve profitability and efficiency. 4. Explore options → Educate him on all his options to exit the business. → This includes a sale to a third party or an inside buyout. 5. Prepare the business for sale → Ensure financial records are accurate and complete. → Assemble a team of advisors, including M&A advisors, accountants, and attorneys, to assist with the sale process. 6. Transition → Ensure the client has a clear plan for their life post-exit. → Align it with their initial goals and objectives discussed. Did it suck that we did not get the opportunity to work with him? Yes. But if you asked me? It might have sucked more that he did not get the opportunity to work with US. Next time something doesn't go your way, find the opportunity to grow in it. Better yet, find the silver lining. Everything happens FOR us, not TO us.

Earlier in the month, I talked about key questions to ask when selling your business. Now I want to talk about timelines! 📅 When you decide to sell your business, there are many things to think through. ➡️ And one of the most important things is the timeline. One of the things I suggest to anyone considering selling their business is to get an advisor involved well ahead of time to plan the exit. Read that again. ☝️ An advisor will be able to help you create a timeline of when you need to do what and help you execute it. For example, this could include: 1️⃣ Long-term Business Strategy (72-48 months before sale): Develop a long-term vision and goals for your business, focusing on market trends and growth opportunities, in order to maximize the value of the business and optimally prepare it for sale/transition. 2️⃣ Succession Planning (60-48 months before sale): Identify and develop potential successors for key positions in the business to ensure a smooth transition. 3️⃣ Financial Optimization (60-48 months before sale): Streamline financial operations and optimize tax strategies to improve profitability and cash flow. 4️⃣ Legal Structuring and Compliance (48-36 months before sale): Review and optimize the legal structure of your business and ensure compliance with all regulations. 5️⃣ Building a Diverse Customer Base (48-36 months before sale): Work on diversifying your customer base and expanding into new markets to reduce dependence on key clients. You worked hard to build a business and deserve to sell it in a way that rewards all of your hard work. Not sure where to begin? Reach out, and let’s see if I can help answer any questions you may have! #entrepreneurship #management #leadership #smallbusiness #people 

We failed due diligence. Twice! And why? Because what we thought was enough preparation and organization was nowhere near enough! Prospective buyers view your business mainly through the lens of risk and if you have any risk skeletons in your closet, that you feel are not a big deal, rest assured buyers and investors will. So, how do you prepare for due diligence to ensure a successful exit? You zoom out and look at your business from the buyer's perspective.  If you had to buy your business again for the sum that you are asking for how would you feel about it? If you had to provide a personal guarantee on the purchase, what would that make you worried about...  Those are some items that you might want to mitigate and address strategically ahead of the sale... Here's a step-by-step process that's been a game-changer for our clients: 1. Start early. Begin preparing for due diligence long before you plan to sell. 2. Get organized. Create a comprehensive data room with all necessary documents. 3. Understand risks. Identify potential red flags and address them proactively. 4. Be transparent. Honesty is key in building trust with prospective buyers. 5. Seek expertise. Don't go at it alone; enlist advisors who can guide you through the process. Remember, due diligence is not just a hurdle to clear. It's an opportunity to showcase the true value of your business. Have you faced challenges in due diligence? What strategies have worked for you? Share your insights or ask questions in the comments below. And if you found this post helpful, please give it a like or repost it. #DueDiligence #BusinessExit #RiskManagement

How Exit Value is in the Eye of the Acquirer... This week I was asked to share my thoughts on exit planning for owners of older, more established businesses - think gen x and baby boomers. So, here's the first nugget of wisdom. Recurring revenue, A-Player leadership team, and growth potential aside... When it comes to selling your business, understanding the perspective of the potential buyer is crucial. It's a fundamental truth in the business world: the value of your company is ultimately determined by the acquirer. This doesn't just mean looking at your financials or market standing. It's about recognizing that different buyers see value differently, shaped by their strategic objectives, market needs, or operational synergies they foresee with your business. 🤔 Consider this: To a buyer aiming to penetrate new markets, your established customer base is a goldmine. Another might prize your business for its innovative technology or efficient supply chain. This variance in perception can dramatically influence your business's valuation in their eyes. 🎯 As you prepare to sell, think beyond intrinsic value. Position your business to appeal to the unique interests of potential acquirers. Highlight those aspects of your business that align with their strategic goals. This not only targets the right buyers but also sets the stage for a sale that truly reflects the unique worth of your business. 💡 In essence, selling your business is not just a transaction; it's a strategic play. Understanding the acquirer's viewpoint can lead to more favorable negotiations and a sale that satisfies both your financial and business legacy goals. 👉 What are your thoughts on aligning business value with buyer perception? Have you experienced this in your exit journey? Let's discuss below! #BusinessSales #BusinessValuation #Entrepreneurship #exitplanning #exitstrategy

Most founders are chasing growth. Smart founders are building for exit. The difference? Brutal clarity. Here are the 10 truths I’ve seen in 1,800+ businesses and $5M+ deals: . 1. Revenue is vanity. Profit is sanity. Cash is reality. I’ve seen practices doing $2.4M a year struggle to stay afloat. And ones doing $700K pull $300K+ in clean personal cash flow. You don’t exit on top-line. You exit on what you keep. 2. If your business can’t run without you, it’s not a business. It’s a job. And buyers don’t buy jobs. The more your company depends on you, the less it’s worth. 3. Systems scale. Hustle burns out. A great team is helpful. But buyers don’t invest in people they can’t retain. They invest in systems that work, with or without you. 4. No buyer pays for potential. They don’t care about your “vision” or how hard you work. They buy repeatable results, clean margins, and stable cash flow. If it’s not in your P&L, it’s not in your valuation. 5. Most owners wait too long to sell. By the time burnout kicks in, performance starts slipping. Margins thin, culture cracks, and value drops. Your window to exit strong doesn’t stay open forever. 6. Burnout gives buyers leverage. I’ve seen deals lose 30% of their value just because the seller was tired. Desperation is visible. And expensive. Start preparing before you feel the pressure. 7. If your name is the brand, you’re the risk. When clients and ops rely solely on you, that’s not value — that’s fragility. A transferable business doesn’t need your face on everything. 8. Messy financials kill deals. If your P&L is full of personal expenses and inconsistent records, expect low offers. Clean books = higher valuation and faster close. 9. Valuation is logic. Exit is emotion. Deals fall apart not because of numbers, but because of fear, ego, or lack of preparation. Mindset is half the exit strategy. 10. Growth without profit is expensive chaos. Doubling revenue without tightening ops or cost control just doubles stress. Scale what works — not what breaks. Your exit is not just a financial event. It’s the reward for everything you’ve built. Prepare like it’s the most important deal of your life. Because it is. Whether you want to scale, exit, or finally stop babysitting your business... I help founders get clarity, structure, and cash. 40+ years. 1,800+ businesses. $5M+ exits. Let's build something sellable. 📞 Book a complimentary strategy session 👉 https://lnkd.in/gSYNqw-P

Many will START a business (it's sexy and fun). Some businesses will take-off and you'll be in BUILD mode (it's hard). Few will EXIT a business (it takes a bunch of variables lining together). But, know this👇 When we exited our first venture our "house" was NOT in order. In fact, it was a mess. Due diligence took 9 months, which is way too long. After the deal was done, I sent our Controller to Hawaii for working so hard and so long during that period. My second exit took a couple of months, due diligence was super straightforward, and the process was clean, fast, and enjoyable. We had a system. When you're starting a business, you "Don't Need to Play House" as Michael Girdley says. But, if you're wanting to exit your business, you 100% need to have things in order. Here are the top areas we had to focus on to get the deal done 😳: - Our financials were a hot mess. Seven (7) companies all done on cash basis we we needed to roll them into one (1) entity... - Operationally we were ok, but we needed to get organized internally. Our records, agreements, purchase orders, etc were all over the place. In our second exit we simply gave access to a data room that had all our records. Super easy. - Customer Relations: The buyer is going to talk to your customers. Our customer concentration was super bad. Buyers love when you've got many many, many customers and your revenue is spread out. We didn't have that. We had like 3 HUGE customers... Still got the deal done, but wowzer... made it tough. - Management Team: If you're selling and you're out, make sure your bench strength is SOLID. Otherwise, guess who's working inside the business after you exit? Yep, YOU! Guess what I did? Yep, I worked inside after the exit, haha... Here's the thing... Don't WORRY... I was able to exit multiple businesses and I had no clue what I was doing in the beginning. Start early and you will get to freedom faster and avoid too many headaches and, most importantly, wasted time. You got this...

 In my last post, I raised the issue of generational transition for a family-owned business. That will involve you as the current leader getting ready to step aside, but long before that, there are actually 5 types of exit that entrepreneurs need to consider. Exit #1 You’re past the initial startup, and realise that you can’t grow if you do everything yourself, so you start building a team. You shift from ‘worker’ to manager and have to delegate. Exit #2 You grow some more and find you need to create a leadership team to take care of operations so that you can focus on growth. You move towards becoming a true CEO. Exit #3 You enjoy being involved but now need to focus on strategy so you need to step away from the day-to-day. It’s time to hire a CEO but remain on the board to keep the vision alive. Exit #4 At this stage, you’re itching to explore other projects and opportunities so you transition away from a governance role to that of the owner or investor, retaining a controlling interest but free to pursue other ventures. Exit #5 Time to move on completely. Manage a generational transition or sale to enjoy the rewards of your success or free up resources for new investments. What stage are you at right now and what’s your plan to progress to the next stage? #Sardorsview #founders #exitstrategies

Are you building your firm to exit? I feel like most boutique consulting firm founders fall into one of two camps on this: 1. Those who started the firm because they were good at something and decided to work for themselves without considering many of the implications of running a business, including an eventual exit. 2. Those who know they want to exit eventually, but have no idea what they need to do within their firm, and personally, to be able to do that successfully. I have, of course, met those founders who have a plan, and have been working that plan ever since they started their firm. But these founders seem to be exceptions, not the rule. An early mentor of mine told me that I "should be planning for my exit from the minute that I start my business" but that advice didn't really make sense to me early on - I guess I was young and dumb at the time. I have talked about with folks like Samir Mokashi, Geoff Bruskin, Jim Carroll, Business Broker CEPA and a number of others, and here are some things I have taken away from these conversations: 1. Think about what you want the exit to do for your personally - financially, emotionally, etc. It's important to identify how you want to feel once the exit happens. 2. Know your numbers. The buyer doesn't care about the blood, sweat, and tears you have put in. Those hold no value, but if you use them to price a premium, you will likely be left disappointed. 3. Shift from the founder-led mentality and operations systems. Yes, you are instrumental in getting the firm to the exit, but if you are instrumental to the firm after the exit, your firm has very little value. 4. Think about and plan for what you are going to do after the exit. Just about every founder i've spoken to who has exited has told me that they developed some level of depression (not necessarily clinical) after the initial high of the exit wore off. Plan for this, just as miticulously as you do in your business. #consultingsuccess #consultinggrowth #exitstrategy #boutiquefirm ------------------- Ever hear the phrase "nobody gets fired for hiring IBM?" Well I help boutique consulting firms compete with and win against the IBMs of their industry by positioning as the lowest risk choice for their ideal clients. Hit the Book an Appointment link at the top of this post, if this resonates and you want to chat.