Exit Planning Tools for Business Owners

Exit Strategies

Exit Planning: If Not Now, When?

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You’ve probably said it yourself: “Talk to me in five years.”

It’s the most common response advisors hear — and it makes sense. You’re heads-down building, not winding down. Exit planning feels like a conversation for later. The business is performing. You have time. And honestly, it’s a lot to think about.

But here’s the uncomfortable truth: later is exactly when most exits go wrong.

You’re already doing exit planning — just not deliberately

Think about the early-stage tech founder. Obsessed with product, grinding 80-hour weeks, convinced the exit is the last thing they should be thinking about. Yet their investors demand an exit strategy on day one — not because they plan to push the founder out, but because articulating the end game forces clarity on everything else.

How does the business scale beyond you personally? What leadership structure does a bigger organization need? What changes in operations and governance will sustain growth? Which decisions build value, and how will that value eventually be realized?

These aren’t exit questions. They’re the right business questions — and exit planning forces you to ask them.

As a privately held owner, no investor is requiring this of you. That’s both a freedom and a vulnerability. Your emotional investment in the business is real. But the business itself has no such attachment. If it succeeds, it needs to run without depending entirely on you. In fact, the more successful it becomes, the less it can afford to.

“I’m focused on building the business,” but building toward what?

Once your personal financial security is solid, continued growth primarily serves the business, not you. That’s fine — but it’s worth naming. Businesses don’t fail because they reach maturity. They fail because transitions are mismanaged.

Exit planning isn’t just a pricing conversation. What your business is worth matters, of course. But equally important — and often ignored — is whether you are ready for life after the business, and whether your organization is ready for new leadership and ownership.

Miss either of those, and even a strong headline valuation won’t save the outcome.

A real exit plan works on three things at once:

1. Enterprise value: what drives it, and how to grow it
2. Owner readiness: your financial and personal preparation for what comes next
3. Organizational readiness: the people, systems, and structure that make the business transferable

It’s a serious undertaking. Which is exactly why the right time to start isn’t in five years.

It’s now.

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.

What to Watch Out for When Getting Outside Advice

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When you bring in an outside advisor — whether it’s an accountant, attorney, consultant, or broker — you’re doing the right thing. You’re acknowledging there’s something you don’t know and going to find someone who does. That’s smart ownership.

But there’s a trap hidden in that process that most business owners never see coming.

Every Expert Has a Favorite Tool

There’s an old saying: to a hammer, everything is a nail.

Think about it this way. You go to your doctor and say, “My shoulder has been killing me — I need help.” The doctor genuinely wants to help you. But whether you walk out with a prescription, a surgery date, a chiropractic adjustment, or a set of acupuncture needles depends less on what’s actually best for your shoulder — and more on which type of doctor you happened to walk in to see.

The internist reaches for anti-inflammatories. The orthopedic surgeon schedules an operation. Each one treats your pain. Each one probably helps. But you’ll likely never realize that your treatment was shaped by who you chose to see, not by some universal best practice for shoulder injuries.

The same thing happens when business owners seek outside help.

The Advisor You Hire Shapes the Advice You Get

When it comes to something as significant as planning your exit from a business, the type of advisor you engage will heavily influence the direction you’re pointed — often without you realizing it.

Bring in an accountant and the plan will likely center on minimizing your tax burden. Hire an attorney and you’ll probably end up focused on asset protection or employment contracts. Work with a business consultant and the conversation will revolve around improving operations and boosting profitability.

None of that advice is wrong. But it may not be complete — and it may not actually align with what you’re trying to accomplish in your life.

A few years ago, a business broker added “Exit Planner” to his business card. When asked how he approached exit planning, his answer was straightforward: if an owner would agree to accept 100% seller financing, he’d help them sell. That was his tool, and he applied it to every situation.

To a hammer, everything is a nail.

What This Means for You

Before you take any advisor’s recommendation and run with it, it’s worth asking yourself: Is this the best solution for my situation — or is it the best solution this particular advisor knows how to deliver?

That’s not cynicism. Most advisors genuinely want to help. But their training, their experience, and frankly their business model all point them toward certain kinds of answers.

The best advisors — the ones worth your time and money — will ask a lot of questions before they start offering solutions. They’ll slow down, make sure they understand your real objectives, and resist the urge to jump straight to their preferred tool.

If an advisor walks into your first meeting already knowing what you need, that’s worth paying attention to. The clarity that comes from being genuinely heard saves time, prevents costly missteps, and leads to a plan you’ll actually follow through on.

The right advice starts with the right questions — not the other way around.

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.

Manufacturer Stuck in the “Neutral Zone”

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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?

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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.

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.

Creating the Perfect Business Exit Timeline!

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When is a good time to start planning the eventual exit from your business?

Simply, you will be leaving your business and hopefully, this will happen in a planned and deliberate fashion. This is something every business owner will address. Unfortunately, things do not always happen in a planned fashion. Those of you in the remodeling industry deal with project-driven plan and schedule changes on a weekly basis. This is nothing new to you!

If we follow the advice from the book The 7 Habits of Highly Effective People by Stephen Covey, we want to implement Habit 2: Begin with the End in Mind! We can follow that recommendation due to another meaningful quote from Steven Covey “your most important work is always ahead of you, never behind you!”

Even if you are 40 years old and plan to work another 15 to 20 years, build your business with the end in mind! Plan for healthy and profitable growth, but also plan for the unplanned. Address the future of your business in good times but also address what will happen in case you are critically injured or die tomorrow. This is referred to as business continuity planning. Plan to do both. Let us begin to address the potential business exit timeline with the possible time frames that come with each milestone below:

Your Exit Timeline

If forced by circumstances beyond your control, you could likely exit your business within a year. Some business owners are here today and – literally – gone tomorrow, but usually not by their own choice. But leaving in style – with adequate cash and having achieved whatever other goals you have set— that takes time, far more than most owners expect.

So, you can leave whenever you choose if you are willing to settle for a less-than-ideal payday, or you can leave in style. The questions is: “do you want to control your own exit, or will it just be something that ‘happens’ to you?” Most owners prefer to control their own destiny but may not have an idea when to get started. Let us look at some tasks common to all exits, and how long they take to complete.

Design and Create Your Exit Plan:

Timeframe: 90 days to one year- While it is possible to create an exit plan in as few as 90 days, most plans require almost a year to create. Most owners need time to ponder and weigh alternative paths, and to think through the many issues that arise when they move through a comprehensive exit planning process for the first time.

Close the Gap:

Timeframe: depends on amount of growth in value needed, but often five to ten years- There is likely a gap between the value you want to receive for your ownership interest and the value you are likely to receive if you transfer the business today. Many owners are in denial when it comes to objectively quantifying the size of the value gap, and exactly how they are going to close it within their planned departure timeframe. The surest way to create sustainable growth is to create a written growth plan for your business with deadlines and accountability as part of your overall exit plan. There are a variety of ways to integrate growth plan development and implementation into your daily/monthly/yearly business management activities.

Tax Planning and Implementation:

Timeframe: three to ten years- Part of reaping full value for your company involves minimizing taxes. Keep in mind that one of the headwinds you may face is increased tax on income and capital gains. Fortunately, planning can not only manage taxation upon the transfer of ownership interest, it may help save taxes on an ongoing, annual basis.

The Ownership Transfer Transaction:

Timeframe: one to ten years- It is possible to transfer your entire ownership by simply transferring all your ownership in exchange for a promissory note right now in one grand transaction, with a big celebration that follows. This is a form of financial suicide. What will you do if the note payments stop coming and you have been absent from the business for a couple of years already? A methodical, possibly incremental approach to preparing the business, preparing yourself and preparing the next owner (especially if he/she is a child or employee) for a successful future tends to create a better outcome for all involved. Take the preparation and execution of the ownership transfer in whatever size bites you can manage, whether that is attaching one area per month or per year – you know your business well enough to know how quickly the recommended action items in your exit plan can be completed.

Conclusion:

Think about your exit as a process, not an event. Everything you have done in your life that was significant took time and multiple steps or stages. Your exit plan is no different. Your exit planning timeline is your bridge to the future that you envision for yourself, your business, and your family. Take control of your future and begin creating your timeline today.

For a free PDF on The Five Critical Elements of a Successful Exit Plan, contact me at david@remodelforce.com. I will forward that PDF report to you.



David Lupberger, CEPA is the President and Owner of Remodel Force. He is a nationally recognized speaker, author, and consultant who helps remodelers and contractors grow longer-lasting, more profitable businesses by developing lean and mean business systems. David believes that consistent results occur only with proven systems. He has worked with hundreds of contractors over the past 30+ years to increase their sales by expanding existing client relationships and develop lifelong clients.