John F. Dini, Author at Your ExitMap

Manufacturer Stuck in the “Neutral Zone”

March 6, 2026 by John F. Dini

Here is how exit planning helped a business owner out of the Neutral Zone.

This manufacturer reached out to an exit planning consultant after receiving a book on planning as a gift from a local professional. He was in no particular hurry to leave his business. In the preceding twenty years of ownership, he had grown it from a local vendor to home builders into a nationally known specialty house.

The company provided him with a good living, generating roughly $700,000 a year in free cash flow for each of the previous five years. He wanted to continue for at least a few more years but also was concerned that he do the right things to maximize his price when the time came to move on.

What’s the Problem?

The consultant pointed out several issues that could dramatically impact his eventual transition.

First, he was handling too many duties that should be delegated. These weren’t things that required his special expertise, but rather areas where he was comfortable in just “taking care of it.” These included troubleshooting IT problems. Although the company had a full-service contract for those services with an outside vendor, he felt it was just “faster” if he first tried to fix the issue himself. Owner centricity is a major value killer in a sale.

On large orders, he prepared the price quotes personally. There were several employees in the sales department who did the majority of quotes, but after one had made an expensive error, the owner took any order over a certain dollar amount as his personal responsibility.

The consultant also pointed out that the business was in the “Neutral Zone” regarding profitability as the principal factor in valuation. With $700,000 in cash flow, it was too big for most entrepreneurial owner-operators to afford.

On the other hand, it was too small to attract a private equity or strategic buyer. Professional acquirers typically pay higher multiples but are seldom interested in acquisitions with less than $1,000,000 in cash flow.

Longer-Term Preparation

The owner retained the consultant as a coach to keep him on track as he addressed the issues. In the next few years, the company made a small acquisition resulting in a second location and greater production capacity. They hired a sales manager who could handle major quotes. At the exit planner’s recommendation, the owner implemented EOS with a different consultant for greater accountability in the management team.

A key employee who, like the owner, had also been a “jack of all trades” enjoyed an incentive program based solely on the company’s gross profit over a fixed level. The consultant pointed out that the improvements driving growth would very quicky make this employee wealthy without any increase in responsibilities. Fortunately, the employee resigned for personal reasons before this became an issue.

For the other employees, they installed new incentive programs based more on increasing profitability. Key employees also received stay bonuses and long-term synthetic equity incentives. This initially caused some concern, (“Are you selling the business?”) but that quickly died down when it became plain that no changes were imminent.

Breaking Out of the Neutral Zone

The next five years brought ups and downs. COVID first reduced sales, then created a surge that couldn’t be duplicated. Eventually the company settled into a sustainable growth pattern, reaching well over $1,000,000 in EBITDA. Of course, there were multiple inquiries about selling during this period. However, the owner felt none of them satisfied his goals for a rewarding life after the business.

His efforts to change the value of his business were driven by the clear personal objectives developed with the planner, rather than just a pursuit of growth for growth’s sake. Eventually he agreed to sell the business to a strategic acquirer for roughly twice the value of an appraisal that was done at the beginning of the process.

None of the changes made were earth-shaking. Having a goal, the means to track it and a framework for moving towards it translated into millions of additional dollars in the owner’s pocket. He was comfortable with a transaction that also preserved his legacy and his employees’ futures.

Is your client ready for a transition? Have them take our 15 minute assessment.

John F. Dini develops transition and succession strategies that allow business owners to exit their companies on their own schedule, with the proceeds they seek and complete control over the process. He takes a coaching approach to client engagements, focusing on helping owners of companies with $1M to $250M in revenue achieve both their desired lifestyles and legacies.

How Much does the Big Picture Count?

February 17, 2026 by John F. Dini

It is currently difficult to have a business conversation without discussing the Big Picture. The voracious 24-hour news cycle needs plenty of fodder to attract eyeballs. It almost seems like the media must pick and choose what will create the most concern. “Seventeen dead in drone attacks? Let’s put that sixth on the schedule.”

Big Picture Issues

Wars in Ukraine, Israel, and Sudan. Attacks on shipping. Russian hacker ransomware. The battle between the U.S. executive and judicial branches. Tariffs, sanctions, inflation, interest rates, boycotts.

Will the price of raw materials go up? How much will transportation cost next week? Should I load up on inventory—or scale back? Can we raise prices proactively? Will my suppliers raise their prices proactively? Will my customers find alternatives to my products or services?

It almost makes a business owner pine for the days when “mundane” issues like employee retention and customer satisfaction were the primary concerns.

How much weight should a business place on Big Picture issues? If you are a tomato grower in Mexico who ships 100% of your crop to the U.S. and just got hit with a 17% tariff, maybe a lot. But if you are a consumer in the grocery store who just saw Roma tomatoes go from $0.23 each to $0.27 each, perhaps not so much.

If you are an Italian restaurant that consumes 400 pounds of those tomatoes a week, the increase in cost from $0.79 to $0.92 a pound is about $52. Perhaps not enough to change menu prices, but enough to be discussed at the restaurant association meeting.

But Does it Count?

Even when the Big Picture seems to matter, the actual impact may be far smaller than it first appears. If you are a greenhouse tomato grower in Arizona, you probably applaud the tariff. If your gross margin on each pound of tomatoes sold is $0.05, you just narrowed the gap by about one-tenth of a cent. Does that really tip the scales?

Has the Mexican grower truly lost the inherent advantages of lower water and labor costs? Or were those already eroded by the Arizona grower’s automation, climate controls, and proximity to market?

In the final analysis, the biggest impact of the tomato tariff may be the concern it creates—the distraction from focusing on other issues—and the fodder for another news cycle. Then the Mexican grower, the Arizona grower, the restaurateur, the supermarket buyer, and the consumer all go back to what they were doing. They simply have a slightly different set of numbers to work with.

The Advisor’s Role

As advisors to business owners, part of your job is to help them focus on what counts. Whether you are a business consultant, accountant, attorney, or financial planner, you have an obligation to help separate the wheat from the chaff. When it comes to running a successful business, tariffs, sanctions, inflation, and interest rates are often just chaff.

You can help your clients—and solidify your position as a trusted advisor—by guiding them to ask the necessary questions:

How much will this really affect your business?
Have you run the numbers?
Does it require a change in what you do, or how you do it?
If a change is called for, will taking immediate action have a substantially greater impact than simply including it in your next planning cycle?

Of course, sometimes the answer to those questions may be yes. More frequently, it will be no. Then you and your client are free to discuss the Big Picture—but without the false urgency that television, social media, and newspapers are trying to foist upon them.

Quality of Earnings and Technology Costs

December 11, 2025 by John F. Dini

When a Quality of Earnings audit identifies deferred technology, the price can be magnified many times. Are you deferring technology costs?

A few months ago, a subscriber to our planning tools called with a tech support question. “Your software doesn’t work,” he said. After some investigation, we identified the problem. He was using a version of the underlying engine, (a part of Microsoft Office) that was four or five generations past end-of-life. When asked about his willingness to upgrade he said, “I don’t want to be forced into getting a subscription.”

(As a side note, no software developers try to develop for compatibility with end-of-life products.)

I understand completely. When Microsoft introduced Office 365 in 2011, I was as irritated as most folks were. We maintained generally up-to-date software but usually skipped a release or two. Upgrading applications happened when we began buying the next round of PCs with newer Windows operating systems. I protested the need to pay for software every year.

Clearly, we lost that battle a long time ago. Nonetheless, I can understand our client’s issue. He runs a solo practice, and his software works just fine for his relatively limited needs.

What are “True” Technology Costs?

I don’t think the same argument is typical in larger businesses, although I still hear it regularly. True hardware and software costs should be measured by employee productivity.

Begin with hardware. Keeping an old computer alive isn’t efficient. (And this is from someone who drives a 17-year-old car!) Here’s how a managed services client of mine described what’s commonly known as the “break/fix” portion of his business for a customer who didn’t want to “subscribe” to managed IT services.

“We get a call that the printer isn’t working and dispatch a technician. We haven’t looked at that particular PC in eighteen months. Employees have loaded new programs. They’ve done some, but not all of the required updates. The technician performs the updates, reinstalls the printer drivers, and gets it working after about 2 hours.”

“When we invoice the tech’s time, the customer has a fit. ‘I could have bought a whole new computer for that much!’ he says.”

No fooling. That’s why break/fix has become pretty much the domain of a walk-in trade for storefront technicians. Most IT companies can’t afford to do it anymore.

Indirect Technology Expense

More importantly, what did the malfunction create in indirect costs to the company? What’s the cost of the employee who was idle, the job that wasn’t printed, and the boss’s time to fight over the invoice?

Let’s say for a simple illustration that an office employee’s fully loaded cost is $52,000 a year, or $1,000 a week. Buying a new PC every three years is about $500. How much time does the employee have to save to pay for the newer computer?

The answer is a bit less than 7 hours… a year. That’s 2 minutes a day. So, the real question becomes “Will a newer computer save this employee 2 minutes a day?” It may not be immediately obvious, but if the tech support company is charging five times the employee’s salary ($150 an hour,) saving even one incident over the next three years more than covers it.

Technology Costs in Quality of Earnings Audits

Technology costs have become an integral expense item for almost every business. That hasn’t escaped the notice of buyers, especially professional buyers.

You can expect a Quality of Earnings (QoE) audit to encompass software licensing and subscriptions, hardware and equipment, IT support and maintenance, cloud storage, telecommunications (bandwidth and redundancy,) cybersecurity, and data protection insurance.

If a company is still working with the old “If it fails, then we’ll replace it,” you can expect a substantial downgrade of its EBITDA. A dozen new PCs, a server, new software licenses, cloud storage, annual costs for a bigger Internet pipe, and a second broadband carrier could easily cost $100,000.

Depending on the multiple being paid, each $100,000 deducted from the EBITDA means 3, 4 or 5 times that amount deducted from the price. That will get the seller’s attention, but by then it will be too late.

Technology costs for current (not cutting-edge) equipment and software are money well spent both now and at the time of a sale. Expect and budget them on a regular cycle. Deferring the expense might just be the definition of “Penny wise and pound foolish.”

The Inexperienced Advisor – An Exit Planning Horror Story for Business Owners

November 18, 2025 by John F. Dini

This is a cautionary tale for business owners—one that’s “based on a true story.” The facts are real, although the exact sequence of events might raise questions if the IRS were to take a closer look.

A small business owner received a $1,000,000 offer to sell his company. He had already been thinking about retirement, and the chance to cash out felt like a perfect opportunity. His original plan had been to sell the business to a long-time employee through a promissory note, but that changed when the cash offer came along.

The business’s profits had always been modest, and the employee couldn’t match the offer. But the owner felt deep appreciation for the employee’s loyalty and past contributions. The employee already owned 10% of the stock, and the owner decided to reward him further by gifting an additional 10% just before the sale.

When the deal closed a few weeks later, they divided the proceeds: the owner received $800,000, and the employee got $200,000.

Here’s where things began to unravel.

The company’s tax preparer was a long-time friend of the owner—also his bookkeeper—who had served him faithfully for over 30 years. Their arrangement worked well for general business needs, and the owner saved money on fees. But the employee used a different advisor. And when tax season rolled around, that advisor raised some critical issues.

Let’s break it down.

The Letter of Intent was signed in January. The additional 10% stock was granted in February. The transaction closed in March. The valuation had been set by the sale offer, but little formal documentation existed for the transfer. The employee’s advisor flagged that the gifted stock constituted a $100,000 bonus—meaning it was taxed as ordinary income. At a 25% tax bracket, that single item triggered a $25,000 IRS bill.

Next came the issue of the company’s structure-

For years, the tax preparer had advised switching to an S Corporation, but the owner never followed through—it seemed like too much hassle. So the company remained a C Corporation and was subject to 21% corporate tax before distributions.

That meant the employee’s $200,000 had to be recalculated. His share was now about $158,000 after corporate taxes.

Of that amount, the original 10% was eligible for long-term capital gains treatment (20% rate), but the recently gifted 10% was double taxed: as short-term capital gain (at his 25% rate) and hit with a 20% parachute payment excise tax because of its proximity to the sale.

He paid nearly $55,000 in taxes just on that second 10%. And the hits kept coming.

With total compensation now over $200,000, the employee’s payout was subject to the 3.8% Net Investment Income tax (the “Obamacare” surcharge). And he still owed that initial $25,000 from the stock bonus.

When all the math was finished, his $200,000 “windfall” ended up being worth only $70,746.

That’s an effective tax rate of nearly 65%.

And the owner? He was double taxed, too. His “cut-rate” accounting services and the decision to avoid S Corporation status ended up costing far more than they saved.

Could it have gone differently? Absolutely.

For a relatively small investment in expert guidance, they might have restructured the transaction. For instance, compensating the employee with a cash bonus instead of stock would have made the payment deductible to the company, taxed only once as ordinary income to the employee.

But none of that was considered—because there was no experienced advisor at the table.

If you’re considering selling your business, don’t go it alone.

Exit planning isn’t just about getting a good offer—it’s about protecting your value and avoiding costly mistakes. Engage with a seasoned advisor who understands the tax, legal, and strategic layers of a business transition.

The cost of advice is small compared to what it could save you.

-Special thanks to Steven A. Bankler, CPA, for his help with this article.

What Business Owners Should Know from the 5th Annual Exit Planners Survey

October 7, 2025 by John F. Dini

Between February 1 and March 2, 2025, ExitMap conducted its 5th annual survey of professionals who help business owners plan successful exits. This is the only survey that gathers insight across multiple advisory specialties—offering a wide-angle view of the professionals supporting entrepreneurs like you during one of the most critical transitions of your life.

The survey included 30 questions and was distributed to over 7,000 experienced advisors worldwide. These are professionals with recognized credentials in exit planning, active roles in professional organizations, or who publicly position themselves as specialists in business transition. We received 434 responses from advisors in eight disciplines, representing six countries and 47 U.S. states, resulting in a 99% confidence level and a margin of error of 3.6%. Statistically, the results offer a strong picture of the current state of the exit planning landscape.

What Does This Mean for You as a Business Owner?

Exit planning is no longer something only for ageing Baby Boomers. It has evolved into a strategic planning tool for many owners in Generation X and even younger. Whether you’re planning to exit soon or simply want to be ready for future opportunities, exit planning helps maximize business value and align your business with personal and financial goals.

Since the pandemic, the number of advisors in this field has grown by 70%, with a 23% increase just last year. That expansion reflects increasing demand—but surprisingly, most advisors say they’re busier than ever. In 2024, 88% reported as many or more planning engagements compared to the previous year.

What Are Exit Planning Advisors Saying?

•70% charge separate fees for exit planning services—this work is specialized and structured.

•96% say exit planning leads to additional support for their clients—like tax strategy, estate planning, and business improvement.

•57% expect to earn over $50,000 this year from exit-related work.

•69% focus on companies valued under $3 million, making their services accessible to smaller businesses.

•80% work with clients remotely, so location isn’t a barrier.

•Over half are 55+ years old, indicating deep professional experience.

Why an Advisor is Essential in Your Exit Strategy

If you’re like most owners, your business is your largest and least liquid asset. The emotional and financial stakes are high when you’re preparing to exit. The growing network of experienced advisors is ready to guide you through this complex process—helping you make informed decisions, increase business value, and ensure that your exit supports your long-term personal and financial goals.

Planning early gives you more strategic options. Unfortunately, many owners delay until a transition is urgent, reducing flexibility and potential outcomes. Advisors also report challenges in coordinating across specialties and maintaining long-term planning engagement, reinforcing how valuable a committed, collaborative advisor can be throughout the journey.

Bottom Line

The transition of Baby Boomer-owned businesses—estimated at $10 to $17 trillion in assets—is driving rapid growth in exit planning. Many of these are family-run or bootstrapped businesses that have grown into significant mid-market companies. Exiting these businesses often requires a team: financial planners, CPAs, attorneys, brokers, bankers, and more.

As the field grows, so does the availability of structured planning tools like those from ExitMap, which advisors use to help owners like you take the first step. If a future transition is anywhere on your horizon, the time to start planning is now—and the first move is finding an experienced advisor to help you do it right.