There is one overriding question that all business owners need to ask themselves. And answer truthfully.
Are you spending all of your time running your business?
As I noted in my book What is your exit strategy?, many business owners are so busy managing payroll, handling employees, developing products, and staying ahead of the competition that exiting their business is the last thing on their minds. They are working in their business—but what about working on it?
When you work in your business, no matter how successful you are, you've created a job for yourself. But to make your business attractive to buyers, you must change your mindset. If your business cannot run without you, no buyer will be interested.
The Hard Truth: Your Business Might Not Be Sellable
For many business owners, the idea of stepping away is unthinkable. Your business is your baby, and you’ve built it with blood, sweat, and tears. But if you want to sell your business, you must see it from a buyer’s perspective.
Buyers want businesses that operate independently. If everything revolves around you, the business loses its value the moment you step away. Without clear systems and trained leadership in place, your business may be worth nothing—no matter how much revenue it generates.
The Value of Your Business
You might believe your business is invaluable, but that doesn’t mean a buyer will agree. A business’s value isn’t based on personal attachment—it’s based on tangible, transferable assets and profitability. The key questions to ask include:
- Can your business function without you?
- Do you know the enterprise value of your business?
- Is your revenue stable or growing?
- Do you have strong financial records?
- Are your supplier and customer relationships diversified?
Buyers scrutinize businesses intensely. If you don't prepare, you’ll be shocked by their level of detail. A business owner who assumes their company is worth $10 million may be surprised to learn from experts that it's only worth $6 million.
The Wake-Up Call: Real-World Business Owners Who Were Not Ready
Take the business owner who made specialized machines for the auto industry. He was a genius at his craft but had no succession plan. His son, who was meant to take over, tragically passed away. The owner, now nearing retirement, plans to simply walk away. What was once a highly valuable business will soon be worth nothing.
Or consider a husband-and-wife landscaping team generating $5 million in revenue. When they decided to sell, they discovered their business had zero value. Why? Because they had built jobs for themselves—not a self-sustaining business. With the right strategic planning, they turned their business around, eventually selling it for $12 million.
How to Work On Your Business, Not Just In It
To ensure your business is valuable to a buyer, you must implement systems that allow it to run without you. Key steps include:
- Owner Independence: Can the business operate if you take a month-long, off-the-grid vacation?
- Diversified Customers and Suppliers: Buyers don’t want risk-heavy businesses reliant on a few key clients or vendors.
- Strong Leadership Team: Train and empower employees to make decisions and lead.
- Financial Transparency: Clean, clear, and organized financial records increase buyer confidence.
- Growth Potential: A stagnant business is far less attractive than one with upward momentum.
The Importance of an Exit Strategy
Many business owners don’t think about their exit until they’re exhausted and ready to leave. By then, it’s often too late to maximize value. Planning early can mean the difference between a lucrative sale and shutting the doors with nothing to show for it.
If you’re not sure where to start, seek out experts who specialize in exit planning. The right advisors can help you:
- Structure your business for a profitable sale
- Identify and mitigate risks
- Increase efficiency and profitability
- Build leadership that ensures business continuity
Don’t Leave Money on the Table
Selling a business is much like selling a house. You wouldn't sell your home without making necessary repairs and staging it to attract buyers. Your business is no different.
You built your business to create opportunity and wealth. Now, ensure it continues to thrive—even without you. Whether you sell in two years or twenty, the steps you take now will determine whether you exit with a big check or simply throw the keys in the bushes.
It’s never too early to start planning your exit. The sooner you start working on your business instead of just in it, the better your future—and your business’s future—will be.
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
