John F. Dini, Author at Your ExitMap

The Transfer Options Many Owners Don’t Consider

October 22, 2026 by John F. Dini

Transfer Options If you ask most business owners what their exit strategy is, they will tell you they intend to sell the business to a third party. It is the most straightforward-sounding option. Find a buyer, negotiate a price, sign some documents, and walk away with a check. The problem is that it may be the hardest option to execute successfully.

According to data from business broker associations, intermediaries fail to sell approximately eighty percent of the businesses they list. When you run the arithmetic on how many businesses are available for sale versus how many buyers exist in any given market, the odds for a typical owner are not encouraging. Yet most owners approach this as their principle plan, not just as a fallback.

Your job as an advisor is to help them understand the broader range of options before they commit to a strategy that may not work. It’s important to start that conversation early enough that the alternative options are still available.

Why the Default Option Is the Hardest One

A third-party sale requires a buyer who is willing to pay a price the owner finds acceptable, has the financial resources to complete the transaction, and is prepared to take on the responsibility of running the business without the current owner. That is a combination that doesn’t always present itself on demand.

It also exposes the owner to a process that most are not prepared for. First is the confidential marketing, then buyer qualification, then due diligence. If you get that far there’s a negotiation of terms, determining representations and warranties, and a transition period that may require the seller to remain involved for a year or more after the sale. It’s not unusual to have an earn-out that depends on performance during that time, or perhaps even afterwards.

The process is time-consuming, often emotionally difficult, and frequently results in a price below what the owner expected.

None of that means a third-party sale is the wrong option. It means it needs to be approached with realistic expectations and thorough preparation. Our job is to help the owner needs to the alternatives.

Option Two: The Internal Sale

Selling to employees or a management team is, in many cases, the most controllable exit option available to a business owner. It is consistently underutilized because it is consistently misunderstood.

The most common objection I hear is “My employees don’t have the money.” That is often not the obstacle it appears to be. A well-structured internal sale doesn’t require employees to show up with a check on closing day. It uses the cash flow of the business itself as the source of acquisition financing and may include equity compensation programs to allow qualified buyers to accumulate ownership over time.

The owner can often maintain control until they are paid. The buyer is someone who knows the business and has been trained to run it. The transition is gradual, planned, and far less disruptive to customers, employees, and operations than a third-party sale.

It typically takes five to seven years to structure and execute a leverage buy-out properly, which is why the conversation needs to start early.

Option Three: Family Succession

When a family member is being positioned to take over, the planning challenges are different but no less significant. Family succession is not merely a matter of adding the next generation’s name to the ownership documents.

The incoming generation needs to earn credibility with employees, suppliers, and customers. That requires time and working in the business in a way that builds genuine capability. The financial structure of the transfer needs to be clear, so the outgoing generation is reasonably compensated and the incoming generation isn’t saddled with debt that undermines their ability to invest in the business.

And the family dynamics relationships, expectations, and the old grievances that never quite got resolved, are present in every conversation. They don’t disappear because the topic is business. If anything, the stakes make them more vivid.

Advisors who can help a family navigate those dynamics are providing a genuinely valuable service.

Option Four: Planned Liquidation

This option is less exciting to talk about, but it is the right answer for more owners than anyone (especially those owners) wants to admit. If the business cannot realistically be sold for a meaningful multiple, or if the owner is the business in ways that can’t be separated, then the owner should run the business profitably for as long as they choose, pay themselves well, invest those proceeds appropriately, and wind down the company when they are ready.

That is not failure. That is a rational financial decision. A business that generates good income for its owner for twenty or thirty years likely has fulfilled its purpose, whether or not it sold at the end.

Helping an owner see that option clearly is serving them better than pursuing a third-party sale that the market won’t support.

Option Five: Watch and Wait

Some owners have built businesses with characteristics that make them attractive to specific buyers in specific market conditions. There may be an opportunity for a strategic acquisition by a competitor, a private equity roll-up of their industry, or a specific buyer who appears at the right moment.

An owner who has kept the business performing well, maintains clean financials, and has structured the company to be transferable is positioned to take advantage of those opportunities when they arise. Waiting for the right buyer is not the same as having no plan.

Your Role in Expanding the Conversation

Most owners default to the third-party sale because it’s the one they’ve heard of. They’ve never had an advisor sit down with them and lay out the full menu of options, and their potential given the circumstances of the owner and the business.

That conversation, done well, is one of the most valuable things you can offer. It positions you as the advisor who is thinking about their whole future, not just the transaction. And it gives you something to plan together, which is where the most valuable advisory relationships are built.

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.

Every Owner Needs a Continuity Plan

September 24, 2026 by John F. Dini

Business Continuity Exit planning conversations tend to focus on the voluntary transition, an owner who decides they are ready to move on, begins preparing the business, and eventually negotiates a sale on favorable terms. That is the version of the story everyone hopes for. It is not always the version they get.

In my experience working with business owners, the planned, orderly transitions require considerable anticipation. However, there are any number of the “Dismal Ds” including death, disability, and disease, can create forced transitions that happen on a timeline and under conditions that benefit no one.

The business owner who hasn’t anticipated those possibilities is not just taking a personal risk. They are leaving their family, their employees, and their legacy exposed to outcomes that could have been prevented.

Contingency and Continuity

There is a difference between a contingency plan and a continuity plan. A contingency plan addresses a business interruption, loss of records, or natural disaster. Many companies have one. They may include backups, alternative workspaces, and emergency lines of credit.

Contingency plans typically lean on one critical factor. They anticipate the presence of the owner to lead the business through a crisis. What if the crisis is the incapacity of the owner? In such cases, a continuity plan is the more appropriate backstop.

Death is the most obvious, and the most clearly planned for in many companies. Life insurance is a standard recommendation, and many owners have some coverage. But does the coverage reflect the actual value of the business? Does anyone know what to do with the business if the owner dies tomorrow — including who is authorized to sign checks, which vendors need to be notified, and who assumes key relationships with major customers?

Disability from disease or accident is statistically more likely than death, and less consistently planned for. A business that can’t function without the owner present faces a serious cash flow crisis if that owner is incapacitated for three months, six months, or longer. In cases where the owner is expected to recover, the business may go into a kind of stasis, postponing critical decisions or new initiatives.

In these cases, the owner may be forced to return too quickly to address failing performance or comes back to a company in crisis.
None of these events can be anticipated. They only need to be handled well.

The Business Continuity Gap

If you asked ten of your business owner clients what would happen to their company if they were unable to work for six months starting tomorrow, how many of them could give you a confident, specific answer?

In reality, very few. Most would describe a rough plan that relies on one or two key people, assumes that customers will stay, and hopes the business will hold together until the owner recovers. That is not a plan. That is optimism.

A real business continuity plan documents who has authority to make financial decisions. It identifies the company’s critical relationships and who is responsible for maintaining them. It specifies where important documents are located, what outstanding obligations need to be honored, and what the first steps are in each of several different contingency scenarios.

The plan should also inform a family member or trusted associate where the owner’s personal passwords are recorded.

It exists in writing, and it exists somewhere that is accessible to the people who will need it, which means not just in the owner’s head.

Buy-Sell Agreements can Address Continuity

For businesses with multiple owners, a buy-sell agreement is not optional. It is the document that answers the most important question in a partner’s death, disability, or departure: who buys whose interest, at what price, and on what terms?

Without a buy-sell agreement, those questions get resolved by negotiation under pressure (Dissention) or by litigation. The results are rarely favorable for anyone involved.

A buy-sell agreement that hasn’t been reviewed in ten years can be almost as dangerous as not having one. If the valuation mechanism in the agreement uses a formula that made sense when it was drafted but doesn’t reflect current market conditions, the resulting price can be wildly wrong in either direction.

The funding mechanism matters as well. A buy-sell agreement that requires a surviving partner to write a large check immediately, without insurance or financing in place to make that possible, is a plan on paper that can’t function in practice.

The Myriad of Dismal Ds

Other Ds are just as threatening to the company but are much more difficult to plan for. Divorce can force a liquidity event in a business that isn’t prepared for one. Distress may include financial challenges that force a sale when the profitability is poor. Disagreement between partners can paralyze a company and force a transition under the worst possible conditions. Defection of a key employee or customer may also deal an unrecoverable blow.

Disenchantment (burnout,) Disinterest, Distraction and Depression may put an owner out of commission as certainly as any physical illness. In such cases, planning is useless. Only a key employee or partner, operating in a culture of honesty, can address the issues.

The challenge with both contingency and continuity planning is that they require preparing for scenarios that feel remote. Business owners are optimistic by nature. They don’t build companies by dwelling on worst-case scenarios. The same forward-looking confidence that made them successful entrepreneurs also makes them resistant to planning for events they don’t expect to happen.

Your role as an advisor is to make the planning feel less like preparing for disaster and more like protecting everything they’ve built. Frame it correctly, and most owners will engage. The protection their family deserves. The employees who depend on the company continuing. The legacy that shouldn’t disappear because of an event no one planned for.

NQDCs – “Let Me Count the Ways”

March 20, 2026 by John F. Dini

Non-Qualified Deferred Compensation (NQDC) plans are a powerful tool for incentivizing and retaining key employees. They offer virtually unlimited flexibility in methodologies, objectives and rewards to suit a company’s strategies and goals.

What is “unqualified?”

Quite simply, NQDCs are discriminatory. Some owners shy away from that term, but discrimination isn’t automatically illegal. Illegal discrimination in the workplace is when an employer or manager treats an employee unfairly due to their race, color, religion, sex, national origin, age (40 or older), disability, or genetic information. 

Non-qualified plans discriminate because they aren’t offered to everyone. The Employee Retirement Income Security Act (ERISA) sets standards for employee benefits. Retirement and health plans must be offered equally to all employees. It does not apply to incentive compensation. As long as the requirements for participation don’t include one of the factors in the paragraph above, it is perfectly legal to discriminate between employees.

There’s a catch, of course. ERISA also allows employers to set aside benefit costs as a pre-tax expense, thus reducing taxable profits. NQDCs have no such advantage. They can be expensed when paid, but the accrual of benefits earned under that plan is a liability rather than an expense.

Therefore, employees should be informed that these plans are unfunded. They are dependent on the company’s ability to pay them when they are due. We will discuss funding and payment in the next article.

What should be incentivized?

The term “deferred” indicates that NQDCs should be used to recognized performance over a period of time. Typical targets include growth in company value, improvements in cash flow or profitability, revenue growth, employee turnover, brand reputation, acquisitions, customer satisfaction and geographic expansion.

Goals can be mixed, prioritized or laddered. For example, vesting may be tied to the employee’s tenure, plus payout levels tied to profitability. Bonuses can accrue based on growth in revenue or profits, with the percentage of payout linked to new products or territorial initiatives.

Half of the awards may be tied to company goals, with the other half linked to individual or departmental objectives. A percentage of any award may be tied to EBITDA, with another percentage dependent on safety benchmarks and another tranche to leadership development.

NQDCs often include virtual equity measures, such as Stock Appreciation Rights (based on a percentage of the growth in value of the business) stock options or phantom stock.

In all cases the recipients of any awards should have a scorecard that plainly outlines their qualifying metrics and time frames.

Who should receive NQDCs?

The complexity of variables indicates that recipients should have several qualifications. First, they must be in a position to affect the outcomes desired. Their decisions should have a direct impact on the incentive calculation.

Second, they need day-to-day visibility into the components that make up the goals. Handing them numbers at the end of the month has little effect if the recipient doesn’t know which levers to pull to make those numbers happen.

Finally, the employees who receive NQDCs should be “keepers.” These plans are not suited for remedial behavioral modification. They are to reward those who are critical to the organization’s success. Ideally, the company wants them to continue performing their duties at a high level for the rest of their career.

Note: This article and the following one (on vesting and funding) are intended as an overview for advisors to business owners. Non-Qualified Deferred Compensation is complex and should be designed with the help of legal and tax advisors.

About YourExitMap.com

November 6, 2020September 21, 2017 by John F. Dini

About YourExitMap.com for Business Owners

YourExitMap.com contains a growing library of interactive tools, educational materials and practical exit planning resources for business owners. The content is designed to be engaging and entertaining, and deliver valuable information about the most influential factor in a successful transition strategy. Is your business prepared to generate the value needed to fund your retirement goals?

Use the companion resource, Your Exit Map: Navigating the Boomer Bust by John F. Dini, to guide you through the generation of real-time results using the ExitMap tools and your actual numbers.

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