The stars don’t always align in business—but when they do, it’s a thing of beauty. Imagine this: A business owner, let’s call him Great Lakes Bob, stumbles into a CPA firm on a whim and asks about selling his company. The CPA connects him with their top MA advisor. Just two days later, another business owner, South Bend Bob, calls the same firm looking to buy exactly the type of business Great Lakes Bob is selling. The deal closes in three months. Everyone wins.
Sounds too good to be true? It almost is. But it’s also proof that when a business is well-prepared for sale and the right opportunities present themselves, transitions can happen seamlessly. This rare scenario highlights the power of being ready—because while chance encounters like this aren’t the norm, the ability to act quickly and decisively is.
The Two Paths to Selling Your Business
When you’re thinking about an exit strategy, you have two basic options: internal or external sales. Many business owners first consider an internal sale—to family, employees, or partners. But if those options don’t work, external sales (also called third-party sales) come into play. These involve selling to outside buyers such as:
- Mergers and Acquisitions (MA) Firms – These firms create competitive demand for your business, bringing in multiple buyers and maximizing value.
- Private Equity Firms (PE) – Investors looking to grow businesses quickly before selling them for a profit.
- Strategic Buyers – Companies acquiring businesses to expand operations, eliminate competition, or gain new capabilities.
- Family Offices – Private wealth management firms investing for long-term generational wealth.
- Business Brokers – Similar to real estate agents, brokers connect sellers with potential buyers, often making a single offer.
What’s Your Business Really Worth?
One of the biggest mistakes owners make is assuming their business is worth a certain amount just because they need it to be. But buyers aren’t sentimental. They’re looking for value.
Consider this example: A business owner received an offer of $52 million for their company. Good deal, right? But instead of jumping at the first offer, they hired an MA firm. The result? They sold for $70 million—an $18 million difference. Having a structured process and expert guidance can make all the difference in the final sale price.
Navigating Earnouts Transition Periods
Not every sale is an instant cash-out. Many deals include earnouts, meaning the seller agrees to stay on board for a period of time to ensure a smooth transition. Typically, earnouts are tied to revenue, earnings, or other performance metrics. In the case of Great Lakes Bob, his earnout period was 18 months, but he hit his target in just six—and even earned an additional bonus for staying on longer.
If you’re considering an earnout, ask yourself:
- Are you willing to stay and work in the business post-sale?
- What percentage of the sale price would you accept in an earnout?
- How long are you willing to remain involved?
Choosing the Right Buyer: What Matters to You?
Selling a business isn’t just about money. It’s also about legacy, employees, and future direction. Here are key questions to ask:
- Do you want all cash up front, or are you open to structured payments?
- Are you okay with the buyer making significant changes, including layoffs?
- Do you want to ensure the business continues under a certain vision?
- Are you comfortable with the buyer potentially selling again in a few years?
- Do you want your employees to have ownership options?
The Big Picture: Start Planning Now
Selling a business is complex, emotional, and—done right—highly rewarding. The biggest advantage you can give yourself is preparation. The earlier you start evaluating your options, strengthening your business, and assembling the right team, the more power you’ll have in shaping your exit.
Think about it this way: If you could sell your business tomorrow, would you be happy with the outcome? If not, it’s time to start planning today.
Your future is yours to design.
Final Thoughts
Business exit planning is more than a procedural necessity—it is a strategic, reflective, and transformative process. By approaching it with the same passion and thoroughness, business owners can create a plan that safeguards their legacy and opens doors to new possibilities. Ultimately, the journey of exit planning is about taking control of your future, ensuring that when the time comes, you exit on your own terms and with confidence.
A well-executed exit plan isn’t just about leaving—it’s about leaving on your terms. Whether your goal is financial security, business legacy, or a stress-free transition, the right planning ensures you exit with confidence.
Want expert guidance for your business exit? Contact us today for a personalized consultation
