Exit Planning
Deciding to sell is often the most important financial decision a business owner will ever make. Working with a Certified Exit Planning Advisor (CEPA) such as Timberline Business Advisors can significantly increase the odds of maximizing enterprise value and successfully harvesting that value in an ownership transition.
Exit planning is a structured process that prepares both the owner and the business for a future sale. Its goal is to make the company transferable, valuable, and sale ready on the owner’s terms, thereby maximizing the business’ enterprise value, optimizing the owner’s liquidity event, and protecting the owner’s financial security after an exit.
Most owners have 70-80% of their net worth in their business, yet 70% of companies never sell. The problem: focusing on quick sales instead of multiyear strategic transformation that attracts buyers.
Effective exit planning starts by aligning the owner’s business, personal, and financial goals, then preparing the company for transition (internal or external) at least three years before a sale. This longer runway is not only good strategy for the present, it’s also critical to a business’ future value because:
A 3+ year runway creates time to improve profitability, professionalize operations, and reduce risk.
Early planning lets owners fully evaluate options such as family succession, management buyout, ESOP, strategic buyer, or private equity.
Early planning lets owners fully evaluate options such as family succession, management buyout, ESOP, strategic buyer, or private equity.
Exit planning strengthens systems, SOPs, leadership depth, and KPIs so the business can run without the owner—essential for buyer confidence and higher valuations.
FAQs
When should I start exit planning?
Ideally 3-5 years before you want to exit. Less time results in less preparation and lower value.
What exit options do I have?
Options include third-party sale, ESOP, management or partner buyout, and family succession. The right option depends on your personal priorities.
What is my business really worth?
We would need to do an objective valuation based on financials, risk, and current market multiples to determine.
How Dependent is the business on me?
Businesses that are owner-dependent are deemed less valuable and riskier. Exit planning focuses on leadership depth, systems, and KPIs so the company can run without you.
Will sale proceeds fund my life after exit?
Figure out how much yearly, after-tax cash you will need, then compare it to a realistic estimate of what you'd net from selling your business.
Who should be on my exit team?
A CEPA should be your exit team quarterback, and the team will include a CPA, attorney, M&A advisor, and your personal wealth advisor.