Thinking About Selling Your Business Someday? Start Here.

Someday is a great word for a vacation to Italy. It's a terrible word for an exit plan.

Here's the thing. Your business might be the biggest thing you own. For a lot of owners, it's a big chunk of their retirement too. But most owners spend more time planning a family trip than planning how they'll leave the company they spent decades building.

I get it. You're busy running the thing. But a good exit doesn't just happen. You build it, the same way you built the business. So let's talk about when to start, who to call first, and how to make sure someone actually wants to buy what you've built.

When Should You Start Thinking About Your Exit?

Short answer: earlier than you think.

A good rule of thumb is to start planning two to five years before you want to sell. That gives you time to fix the things that would scare a buyer off. It also gives those fixes time to show up in your numbers. Buyers want to see a track record, not a promise.

The longer answer is even better: you should always be running your business like it could be sold. Not because you want to sell tomorrow. Because life happens. Health changes. A buyer knocks on your door with an offer out of nowhere. A partner wants out. When that day comes, you want to be the owner who's ready, not the one scrambling to find last year's tax return.

And here's a fun bonus. A business that's ready to sell is usually a business that's more fun to own. It runs smoother, makes more money, and doesn't fall apart when you take a week off.

Who Should You Talk to First?

Most owners think the first call is to a business broker. I'd push back on that a little.

Before you figure out how to sell, figure out why you're selling and what you need from the sale. How much money do you need to walk away with to live the life you want? What do you want to do next? Do you want to sell to your kids, your employees, or an outside buyer? Do you want to stick around for a few years, or hand over the keys and head to the golf course?

Those are personal questions, so start with someone who knows your whole financial picture. That's usually a financial planner or wealth advisor who works with business owners. Once you know your target number, every other decision gets easier.

After that, you'll build out a team:

• Your CPA to clean up the books and plan for taxes. The way a sale is set up can make a significant difference in what you keep.
• A business attorney to handle contracts, structure, and the fine print.
• A valuation expert to tell you what the business is really worth today.
• A business broker or investment banker when it's time to actually find a buyer.

Think of it like building a house. You don't call the roofer first. You start with the plan.

Your Business Is Probably Worth Less Than You Think (For Now)

This is the part where I lose a few friends.

Most owners think their business is worth more than a buyer will pay. It makes sense. You've poured years of sweat, stress, and missed dinners into it. That has to count for something, right?

To you, absolutely. To a buyer, not so much. Your business is your baby. But buyers don't buy babies. They buy future profits, and they want to know how likely those profits are to keep coming after you leave.

A buyer is really asking two questions:

• 1. How much money does this business make?
• 2. How risky is it that the money stops once the owner walks out the door?

The more risk they see, the less they'll pay. And here's the kicker: a lot of that risk is stuff the owner doesn't even notice, because they've been living with it for 20 years. Which brings us to a few classic red flags.

Myths That Make Buyers Nervous

I hear these all the time. Owners say them with pride. Buyers hear them and reach for the antacids.

•"My customers would never leave me."

That might be true. They love you. They've known you for years. You remember their kids' names. But that's the problem. If they're loyal to you, what happens when you're gone? A buyer wants customers who are loyal to the business, not just the person running it.

•"No one can do what I do."

I believe you. And that's exactly what scares a buyer. If you're the only one who knows how to price the big jobs, close the big deals, or fix the big problems, then the buyer isn't buying a business. They're buying a job, and the only person who knows how to do it is about to leave.

•"My business is worth what I need it to be worth."

I wish this worked. Your retirement number and your business's value are two different things. The market decides what it's worth, not your spreadsheet.

•"I'll get it ready when I'm ready to sell."

By then, it's usually too late to fix much. The changes that raise value take time to stick and time to show up in your results.

The good news is that every one of these can be fixed. You just need to start before you put the "For Sale" sign out.

The Business Tune-Up

Think of this like getting your car ready to sell. You wouldn't put it on the lot with a check engine light on and fast food wrappers under the seat. Same idea here, just with a lot more zeros.

You find the things that make your business less valuable, then fix them one at a time over two to five years. Some of the fixes are surprisingly simple, and they can make a meaningful difference in what a buyer will pay.

•Write down how things get done.

These are called SOPs, or standard operating procedures. It's just a playbook for how your business runs: how you answer the phone, how you bid a job, how you bill a customer. If the only copy is in your head, it walks out the door with you. A written playbook tells a buyer the business can run without you.

•Make yourself less important.

I know, it stings a little. But the less your business depends on you, the more it's worth. Build a team that can handle customers, make decisions, and keep things moving when you're on a beach with your phone off. Start by taking a real two-week vacation. Whatever breaks while you're gone is your to-do list.

•Get your numbers in shape.

Buyers will dig through your books carefully. Make sure your financials are clean, on time, and easy to understand. Keep personal expenses out of the business. Watch the basics, like your profit margins, how fast customers pay you, and how much debt you carry. Healthy numbers build trust, and trust gets you a better price.

•Spread out your customers.

If one customer brings in a large share of your revenue, that's a risk. Losing them could sink the ship. More customers, with none of them too big, makes a buyer breathe easier.

•Turn one-time sales into repeat sales.

Service agreements, maintenance plans, and subscriptions make your income more predictable. Buyers love predictable.

None of this is glamorous. But each fix lowers the risk a buyer sees, and lower risk means a higher price. Even better, you get to enjoy a smoother, more profitable business while you're still the one owning it.

The Bottom Line

You only get to sell your business once. You want to get it right.

The owners who tend to get the best outcomes aren't always the ones with the biggest companies. They're the ones who started early, built a team, wrote things down, and made themselves a little less necessary every year. By the time they sold, the business could run without them.

A business that can run without you is a business a buyer will pay up for.

If "someday" is starting to feel a little closer, let's talk. We'll start with you: what you want your life to look like after the sale and what you need from it to get there. Then we can help you think through the right team and a plan to get your business ready.

You built something great. Let's make sure you get paid for it.

- Blake