Exit Planning for Business Owners: Setting Up for a Profitable Sale

Thinking About Selling Your Business?

If you’re a business owner, chances are you’ve poured decades of work into building something meaningful. But when it comes time to exit, many owners rush the process, miss critical steps, and walk away leaving money on the table. This post will walk you through what smart business owners are doing 12–36 months before they sell—and why it could add six to seven figures to your final deal.

Let’s break down the full exit planning process, from readiness assessment to buyer negotiations, using real insights from over a decade of M&A advisory experience.

Why Most Business Sales Fail

Most deals don’t fall apart at the start—they collapse in the final stages.
Common last-minute deal-breakers include:

• Disagreements over working capital

• Financials that can’t be verified

• Owners not being ready to walk away

• Lack of a strong management team

• Misalignment on valuation or terms

These issues are avoidable—but only if addressed years, not weeks, before the transaction.

The Four Phases of Exit Planning

Successful business exits follow a predictable structure. Skipping one step increases the risk of a failed deal or undervaluation.

1. Business Readiness Assessment

Start by reviewing your company’s financial health, team structure, and market position. Are your books clean? Are you still involved in every decision? Can your company run without you?

2. Value Enhancement Strategies

Focus on what adds tangible value to buyers:

• Clean financial statements

• Documented SOPs

• Strong management team

• Customer diversification

• Scalable operations

3. Choosing the Right Exit Strategy

Understand your ideal buyer. Are you looking to sell to a strategic competitor, a private equity group, or a key employee? Your buyer profile determines your valuation expectations and marketing approach.

4. Execution and Transition

The final phase involves due diligence, legal negotiation, and smooth operational handoff. With proper planning, your employees stay secure, your customers stay loyal, and your business stays strong post-sale.

How Clean Financials Can Raise Your Valuation

One of the most impactful changes you can make before selling is cleaning up your financials.

Buyers immediately discount businesses with:

• Commingled personal expenses

• Outdated accounting practices

• Inconsistent or undocumented revenue

By investing in a bookkeeper or fractional CFO to prepare accurate, GAAP-compliant financials, many sellers raise their valuations by 10–30%—often adding hundreds of thousands to the final sale price.

Why Buyers Care About Your Team

You may run the business—but if it can’t run without you, it won’t sell.
Buyers want to see a competent management team already in place. That means:

• A clear org chart

• Defined leadership roles (operations, sales, delivery)

• Employees who are trained, retained, and trusted

A strong team reduces risk for the buyer and increases your negotiating leverage.

Growth Plans Are Not Optional

Historical earnings matter—but growth potential drives valuation. When buyers ask, “Where is this business headed?” you need real answers. Be ready to show:

• Revenue projections for the next 12–36 months

• Specific growth initiatives (new services, markets, or products)

• How your team will execute those initiatives

Empty growth promises are easy to spot. Be prepared to back up your plan with operational details and market data.

Common Mistakes That Cost Owners Millions

Owners who wait until due diligence to start planning make critical mistakes:

• Trying to clean up books under pressure

• Overvaluing the business with no buyer interest

• Failing to understand buyer expectations

• Letting operations suffer during the sale process

The fix? Start exit planning 3–5 years before you want to sell. Time gives you leverage. Leverage gets you paid.

Who Will Buy Your Business?

There are five main buyer profiles, each with different motivations and deal structures:

1. Strategic Buyers: Industry peers or competitors

2. Private Equity Groups: Often require $3M+ in EBITDA

3. Independent Sponsors: Experienced operators with capital access

4. Self-Funded Searchers: Often use SBA loans

5. Management Buyouts: Internal team or key employee purchase

Knowing your likely buyer shapes your prep strategy.

Timeline: How Long Does It Really Take to Sell?

The full sale process—after you've found a buyer—typically takes 90 days. But finding the right buyer? That could take 6–24 months or more. And preparing your business to be buyer-ready? That’s where the real work begins.

Sellers who plan ahead give themselves a massive advantage. They attract better buyers, negotiate better terms, and walk away with higher payouts.

Further Reading

Business Exit Planning: How to Create Value Before a Sale
This article delves into the importance of exit planning, outlining strategies to strengthen your position before engaging with potential buyers. It emphasizes the need for a trusted advisor and provides a step-by-step approach to maximize business value prior to sale.

How to Develop a Business Exit Plan | U.S. Chamber of Commerce
This comprehensive guide from the U.S. Chamber of Commerce discusses the benefits of early exit planning, different strategies for selling or closing a business, and the importance of aligning your exit strategy with long-term goals.

Business Exit Planning: 5 Steps to Help Get Started - Edward Jones
Edward Jones outlines a five-step process for business exit planning, including building a professional team, determining financial needs, understanding business valuation, and developing strategies to bridge financial gaps.

Exit Plan Strategies for Business Owners: Your Guide to a Successful Business Transition
This article provides insights into various exit strategies, such as selling to third parties, and emphasizes the importance of maximizing value, reducing tax liabilities, and ensuring smooth transitions during the exit process.

Effective Exit Planning for Business Owners | LBMC
LBMC discusses the significance of proactive exit planning, exploring common strategies and offering practical tips to prepare for a successful business exit. The article highlights the benefits of starting the planning process early to maximize business value.

The Bottom Line

Exit planning is not just about spreadsheets and lawyers—it’s about protecting the legacy you’ve built and ensuring your people, your profits, and your purpose continue after you're gone.

Start early.
Invest in financial preparation.
Build a team that thrives without you.
And treat your future buyer like they’re part of the family.

Because if you do it right, they just might be.

Contact us today to learn how we can support your next deal.