What is business exit planning? Choose your ending, not the market

You didn’t build your business to watch a buyer pick it apart like a yard sale. You built it to matter, to pay you back for the years you went last and carried payroll on your back. Here’s the hard truth: the price you get is decided months before you ever meet the buyer.

Most owners wait until they’re tired, call a broker, then accept the number that hurts least. That’s not strategy; that’s surrender. If you’re asking what business exit planning is, it’s the antidote to that slow bleed.

The stakes: why this matters now

Exits are a one-shot game. You don’t get a redo. The wrong move on timing, structure, or story can cost you millions and years of your life locked into someone else’s plan.

I watched a founder, call him Sam, turn down a fair offer because he thought a better one would appear. Six months later revenue dipped, a key manager quit, and the offer evaporated. Sam didn’t lose a deal; he lost five years. Planning would have given him options before the wheel wobbled.

If you want control at the end, start before the end.

What business exit planning is, in plain English

Exit planning is deciding how you want your story to end, then shaping the company so that outcome becomes likely and lucrative. It isn’t a binder; it’s a sequence of practical moves that remove risk for a buyer and increase your leverage.

It starts with your goals: cash now or later; clean break or partial sale; strategic buyer or financial buyer; legacy or maximum price. Then you align the business to that target: your financials, your team, your contracts, your growth story, your role. You’re not guessing what a buyer wants; you’re engineering it.

Ask yourself: if a buyer walked in tomorrow, what would they try to discount? Remove it before they arrive.

Choose your ending now

There are only a few endings. Choose which one you get.

• Full sale: walk away after a short transition; simplest; lower headline if the business depends on you.
• Majority sale: take chips off the table, keep equity for a second bite; requires a strong number two and real governance.
• Minority recapitalisation: cash for growth and de-risking; works if you welcome a partner and keep reporting clean.
• Management buyout: legacy and continuity; usually a lower price without outside competition.

Each path rewards different strengths. Strategic buyers pay for synergy, cross-sell, product/tech, and market access. Financial buyers pay for durable cash flow, growth levers, and leadership depth. Pick your lane early; the story you tell and the proof you build must match.

Make your business buyer-ready

Buyers pay for certainty. Certainty comes from clean data, repeatable cash, and a company that runs without you.

• Clean books: three years of monthly financials tied to tax returns; clear gross margin and cohort data; no personal expenses hiding in the weeds.
• Durable revenue: recurring or repeatable sales with low churn; balanced customer concentration; assignable contracts.
• Transferable operations: documented processes; a leadership bench; a clear sales process; a forecast you actually hit.
• Protected value: IP documented; key supplier and partner agreements locked; compliance tidy; no side deals lurking in email.

You don’t need perfection. You need fewer questions. Every unresolved question becomes a discount. Every documented answer becomes price.

Build a story that compounds, not spikes

A deal is a story under oath. You will be asked to prove everything.

Your story should be simple: we acquire customers this way, at this cost, they stay this long, we expand wallet share with these plays, and margins improve with scale because of these efficiencies. Short, true, provable.

Don’t chase a last-minute revenue spike. Buyers smell sugar highs. They pay for clean, steady growth, not heroic quarters. If growth is slowing, name it, frame it, and show the plan that already works in small scale. Honesty with spine beats optimism without it.

Create price tension, not hope

Hope is not a negotiating strategy. Competition is.

Build a modest list of right-fit buyers long before you need them. Warm a few strategic relationships through partnerships or content. Track who is buying whom and why. When you’re ready, run a tidy process with a tight timeline and consistent information. Give each buyer a fair shot, let them know there are others, and let the best terms rise.

Get your materials market-ready: a crisp confidential information memorandum, a data room with an index and summaries, Q&A logs, a clean cap table, customer metrics, legal housekeeping. Pre-due diligence saves time. Time saves momentum. Momentum saves price.

Your role during the exit

You have two jobs during an exit: keep the company hitting plan and make the buyer trust the future. Your calendar must reflect both.

Pick a small strike team: a finance lead, legal counsel, an operator who knows where everything lives. Protect your week with focus blocks for deal work. Over-communicate with your team so fear doesn’t create rumors. Manage your energy—sleep, exercise, think. You are the thermostat; your mood will leak into the numbers.

On terms, watch the silent killers: long earn-outs with fuzzy metrics, indemnity caps that eat your proceeds, working capital traps, non-competes that chain you for half a decade. Structure is as important as price. The wrong structure turns a win into a slow regret.

The quiet math that sets your number

Valuation is math plus risk. You control more of it than you think.

Reduce risk and multiples rise. Diversify revenue and buyers relax. Replace yourself and they believe the forecast. Show cash conversion and they see debt capacity. Build a second tier of leaders and they picture scale. The multiple isn’t gifted; it’s earned by removing doubt.

If you remember nothing else, remember this: buyers don’t pay for potential. They pay for de-risked potential.

Key takeaway

You don’t sell a business; you transfer a machine that prints cash without you. Exit planning is the work of building that machine and telling its story so clearly that a buyer can see themselves at the controls. Do that, and you choose your ending—not the market.

Your next step

If you stopped working for 60 days, would a qualified buyer still pay the number you want? If not, what single risk can you remove this month that would make the next buyer breathe out and raise their price?

And if you already know the answer, when will you start?