Why Exit Planning Changes Your Outcome
Most business owners spend more time planning a family vacation than planning the sale of the most valuable asset they own. Here's what that costs.
Higher multiples
Prepared businesses — with recurring revenue, documented systems, and management depth — command 1×–2× higher multiples than businesses sold reactively.
Faster closing
Prepared businesses go through due diligence cleanly and close faster. Unprepared businesses stall in due diligence — and time kills deals.
More control
Planning ahead means you choose your timing, your buyer, and your deal structure — rather than selling reactively out of burnout or necessity.
Your 3–5 Year Exit Planning Timeline
Start anywhere on this timeline — even if you're already close to market, there are steps that will improve your outcome.
Build the foundation
- Get a preliminary business valuation to know your baseline
- Identify the value gaps between where you are and where you want to be
- Begin reducing owner dependence — document processes, delegate key relationships
- Start diversifying your customer base if concentration is high
- Separate personal and business finances completely
- Talk to a financial advisor about your personal exit number
Drive value up
- Implement the improvements identified in your value gap analysis
- Build recurring revenue — contracts, retainers, subscriptions
- Invest in a management team that can run without you
- Lock in key customer contracts and supplier agreements
- Clean up your lease — ensure it has a renewal option and is assignable
- Get your books professionally reviewed or audited
Prepare for market
- Engage an M&A advisor for a formal valuation
- Prepare 3 years of clean, recasted financials
- Resolve any pending legal, compliance, or licensing issues
- Identify what deal structure works for you — asset vs stock, earnouts, seller financing
- Begin quietly pre-marketing to your advisor's buyer network
- Decide your post-close involvement — are you willing to stay 1–2 years?
Execute the sale
- Go to market confidentially with a prepared Confidential Business Review
- Qualify buyers before any identifying information is shared
- Negotiate LOI terms — price, structure, working capital, reps & warranties
- Navigate due diligence — your preparation makes this smooth
- Coordinate closing with attorneys, accountants, and lenders
- Transition ownership and ensure continuity for employees and customers
Six Things That Increase Your Multiple
These are the factors that separate a 3× business from a 5× business — even with identical revenue. Most of them take 12–36 months to build properly.
Recurring Revenue
Contracts, subscriptions, and repeat customers that provide predictable cash flow. This single factor can increase your multiple by 1× or more.
Management Depth
A business that runs without the owner is worth significantly more. Building a leadership team is the highest-ROI preparation investment.
Customer Diversification
No single customer over 15–20% of revenue. Customer concentration is the #1 discount buyers apply in due diligence.
Clean Financial Records
Three years of properly maintained, bank-reconciled financials with clear expense categorization. Sloppy books kill deals.
Documented Systems
SOPs, training materials, and operational processes that enable anyone to deliver your service. Documentation enables transfer.
Growth Trend
Consistent revenue growth signals health and momentum to buyers. Even modest growth (5–10% annually) significantly supports valuations.
Six Exit Planning Mistakes That Cost Business Owners Money
Starting too late
Most business owners start thinking about exit planning 6–12 months before they want to sell. That's not enough time to fix the issues that most reduce value. Start 3–5 years out.
Anchoring on an unrealistic number
Many owners have a number in their head — often based on what they need for retirement, not what the market will pay. A professional valuation early sets realistic expectations.
Not addressing owner dependence
If your customers buy from you personally, your business is worth far less than its revenue suggests. This takes years to fix — not months.
Skipping the advisor
DIY business sales consistently achieve lower prices, take longer, and break down in due diligence more frequently. An M&A advisor typically more than pays for themselves in deal outcomes.
Ignoring the tax structure
How a deal is structured (asset vs stock sale, installment sale, QSBS treatment) can have enormous tax implications. These decisions need planning — not last-minute fixes.
Letting emotions drive decisions
Selling a business you've spent years building is emotional. Owners sometimes reject reasonable offers, over-negotiate, or delay for the wrong reasons. A good advisor helps you stay objective.
Where John Salony Fits Into Your Exit Plan
Exit planning is a team effort. You need a financial advisor to plan for personal wealth, a CPA for tax structuring, an attorney for deal documentation, and an M&A advisor who understands how buyers think and what makes businesses valuable.
John Salony specializes in the M&A advisory piece — helping business owners understand what their business is worth today, what needs to change to maximize value, and how to execute the sale process from valuation through closing.
Unlike transaction brokers who only get involved when you're ready to sell, John works with owners 1–5 years before a planned exit to identify value gaps and build toward the best possible outcome.
What Would Your Business Be Worth
If You Started Planning Today?
A 30-minute confidential conversation — no pressure, no obligation. John will give you an honest assessment of your business value, the gaps that matter most, and what your exit could look like.
100% Confidential · No Upfront Fees · No Obligation
