Originally published by Forbes, featuring Frank Williamson, among other business experts.
We’re grateful to Forbes for the opportunity to contribute to this important conversation. Read the full below.
However, developing an exit plan is not as easy as it sounds, and many leaders make missteps in trying to ensure a sale is successful. Below, 20 Forbes Business Council members share one thing most business owners get wrong when preparing for an exit. Read on to learn how to flip those mistakes early enough in the process to improve the odds of a successful sale.
1. Waiting Too Long To Start Planning
Most owners wait too long to start planning. This is often because they’re more focused on price than on finding the right fit. Our most successful clients start by thinking like a buyer. Keep careful records, understand what makes your business valuable and start talking to potential buyers before you truly need to sell. Success comes from planning ahead and seeing your business through fresh eyes. – Frank Williamson, Oaklyn Consulting
2. Relying Too Much On Themselves
The most common mistake business owners make when preparing to exit is relying too much on themselves and focusing only on profits. Buyers value businesses with clear systems, independent teams and growth potential. To maximize valuation, start early by streamlining operations, delegating tasks and building a business that can run without you. – Erik Pham, Bizreport
3. Underestimating The Narrowness Of Their View
Most business owners underestimate how narrow their view becomes inside the well of daily operations. Like Zhuangzi’s frog, they can’t imagine the ocean beyond their current business. The best exits start when business owners climb out early. This helps them gain perspective, diversify value, empower successors and shape a company others can both envision and sustain long after their departure. – Leonie H. Mattison, MBA, EdD, The Thread Movement
4. Excluding Key Leaders From The Process
A common mistake we see is excluding key leaders from exit plans, which creates a major red flag for buyers. We advise motivating the leadership team with development paths and incentives to deliver your business goals. Their active role in executing the exit strategy will not only be rewarding, but will also prove invaluable continuity, de-risk the transition and directly justify a higher valuation. – Brian Doyle, Ross Bennet Smith
5. Avoiding Deep Research
Conduct research with potential buyers to discover what they think is most valuable about your business and what’s not valuable. Doing this research myself helped me understand exactly what buyers wanted as I positioned my agency for sale. – Theresa Neil, Femovate
6. Prioritizing Market Timing Over Clarity
Market timing is often more desirable to owners than clarity. They complicate finances, hide operational quirks and minimize documentation. Think of exit planning as a paradigm change, where each quarter is instead considered a rehearsal. Clarify reporting, show repeatable revenue and make the business easy to understand. Transparency and confidence are all buyers pay for. – Gianluca Ferruggia, DesignRush
7. Selling A Finished Product
Many business owners sell a finished product when buyers pay premiums for untapped upside. Most owners polish their business to perfection before they exit. Buyers pay for predictable cash flow, but they also pay multiples for what comes next, not just past performance. When you’re 18 months out, document your strategic backlog, including untapped markets, expansion plays and underutilized assets. Then, sell the engine and the runway. – George Alifragis, Metropolitan Partners Group
8. Overestimating The Company’s Worth
Most owners have an overinflated sense of their company’s worth. This is especially true in lifestyle businesses that have neglected the tedious and important reporting requirements that are required for a sale. You can’t expect to get top dollar for a company with an incomplete financial picture and a murky growth picture. A few years before you want to sell, take the time to get your house in order. – Joe Crandall, Greencastle Associates Consulting
9. Focusing Too Heavily On Income
Many business owners focus too heavily on income instead of holistic value creation. Value creation comes from building a business that’s structurally sound, culturally strong and operationally transferable. When your systems, from operations to customer relationships, are documented, repeatable and not dependent on you, your business becomes far more attractive to potential buyers. – Scott Snider, Exit Planning Institute
10. Taking On Too Much Risk
Lower risk results in a higher valuation. Business owners are typically entrepreneurial risk-takers, but this is not what buyers are looking for. Buyers assess financial performance through returns and consider the likelihood of that financial performance continuing after they buy or invest. Ignore either at your peril. – Craig West, Capitaliz
11. Getting Too Emotionally Invested In The Sale
Most business owners are too emotionally invested in the deal. They often see it as a reflection of their identity, not just a transaction. The best way to flip that mindset is to let a professional handle the day-to-day negotiations to ensure decisions are made based on logic and value, not emotion. It’s hard to detach, but that separation often creates the best outcomes. – Vinayak Mahtani, bnbme Holiday Homes
12. Attempting To Sell History Over Momentum
Too many founders sell history, not momentum. Buyers invest in where the business is going, not where it’s been. Reframe your exit story early by highlighting defensible edges, systemized operations and future cash engines. A compelling forward narrative, backed by clean data, turns a transaction into a premium exit. – Volodymyr Silchenko, OMNIA AI
13. Forgetting To Prepare Their Mindset
Most business owners prepare their finances for an exit, but forget to prepare their mindset. They tie their identity and worth to the business, and when it’s gone, they feel lost instead of free. The key is to plan early. Build a business that can run without you and a life that fulfills you beyond it. If you lead with clarity rather than attachment, your exit becomes a transition, not an ending. – Jennifer Perri, SHERO Life & Empowerment Coaching. LLC.
14. Neglecting Proper Record Keeping And Compliance
A business exit becomes convenient and stress-free if all records, from accounting and licenses to standards of performance practices, are documented and regularly followed with an ethical code of conduct. Perform regular routine audits to save more time for last-minute questions. – Ramesh Arora, SIGNATURE HOSPITALITY GROUP
15. Overlooking Storytelling
Most business owners spend years polishing the books but forget to polish the story. Buyers don’t just purchase profits; they buy potential. Start selling the dream early because in every great exit, belief is the secret ingredient that makes the numbers sparkle. – Paul Boross MBE, Big Sky
16. Failing To Build Solid Systems
Most founders focus on storytelling, not systems. Buyers don’t just acquire vision; they buy repeatable, documented processes. If your business can’t run without you, it’s not sellable. Flip the mindset early by building for independence, not dependence. If you make yourself obsolete, your company becomes irresistible. – Lior Pozin, AutoDS
17. Ignoring Transferable, Future-State Value
Most owners over-index on today’s EBITDA and ignore transferable, future-state value. Buyers pay for de-risked growth. They want recurring revenue, low client concentration, a reliable demand engine and systems that run without the founder. Flip the mindset early by building a sellable company. Codify intellectual property, document processes and prove a repeatable pipeline, not just a valuable one for today. – Kristine Johnson, Cognition Studio Inc.
18. Shying Away From Hiring New Leadership
A major blind spot is sometimes the one in the mirror. Many founders must come to terms with the fact that they will need new leadership to scale the business post-transition. They always need to be aware of any dependencies the business has on them. They must eliminate any key man risk and build systems and leadership teams that can propel the business without the owner or founder. – John Gulnac, SolomonEdwards
19. Treating A Sale Like The End
Most owners treat a sale like a finish line. The moment you focus on the deal instead of the business, momentum slips. Keep building and investing, and don’t let a date dictate performance. If you run the company for long-term health, the right sale will take care of itself. – Ron Rudzin, Saatva
20. Viewing An Exit As A Single Point In Time
As a business owner, you can’t look at an exit as a single point in time. One key to success in selling my organization was viewing my succession as a transition and managing that change both before and after the actual transaction. Staying on with the company for a period of time post-closing can be highly beneficial for signaling stability and setting the stage for continued high performance. – Kristen M. Waterfield, The Malvern School