Business Exit Planning: How to Sell Your Company for Maximum Value

Why Most Founders Screw Up Their Exit

I've sold five SaaS companies. The first one, I left money on the table because I didn't prepare properly. The last three? I knew exactly what buyers wanted to see, and I spent 12-18 months getting the business ready before I even talked to a broker.

Business exit planning isn't something you start when you're ready to sell. It's something you should be thinking about from day one, even if you plan to run the company for another decade. The businesses that command premium valuations are built to be sellable-whether they actually sell or not.

Here's what nobody tells you: the difference between a 3x and a 6x multiple often has nothing to do with revenue. It's about how easy you make it for a buyer to see themselves owning your business without you in it.

The statistics are brutal. Nearly 80% of businesses that go to market never actually sell. Half of business owners plan to exit within the next five years, but most don't have a documented plan. You know what happens when you wing it? You either get a lowball offer or the deal falls apart during due diligence.

Start With Clean, Organized Financials

This is table stakes, but you'd be shocked how many founders skip it. If your books are a mess, buyers assume everything else is a mess too.

Get a real accountant. Not your cousin who's good with QuickBooks. Someone who specializes in preparing businesses for sale. They should be generating monthly P&Ls, balance sheets, and cash flow statements that reconcile perfectly with your bank accounts.

Separate your personal expenses from business expenses immediately. That subscription you're running through the company? That dinner you expensed when it was 80% personal? Clean it up. Buyers will scrutinize every transaction during due diligence, and every weird expense becomes a negotiation point.

Calculate your real EBITDA (earnings before interest, taxes, depreciation, and amortization). Then calculate your adjusted EBITDA, which adds back one-time expenses and owner compensation above market rate. This is the number buyers actually care about, because it shows the true earning potential of the business.

Your financial reporting needs to follow GAAP standards. During due diligence, buyers will identify every accounting gap or non-compliant practice and use it to renegotiate the price down. Fix these issues now, not when you're trying to close a deal.

Get a Quality of Earnings Report Before You Go to Market

Here's something most founders don't know: you should get your own quality of earnings report done before buyers start their due diligence.

A QoE report is different from an audit. An audit verifies that your financials follow GAAP. A QoE report analyzes whether your earnings are sustainable and identifies issues that will affect your valuation. It looks at adjusted EBITDA, normalizes for one-time events, and shows buyers exactly what they're getting.

When you commission a sell-side QoE report, you find problems before buyers do. You can fix accounting errors, justify anomalies, and prevent buyers from dropping their offer mid-diligence because they discovered something you didn't disclose.

The cost varies based on complexity-typically $35,000 to $150,000 depending on your revenue and how clean your books are. But if it identifies issues that would've killed your valuation by 20%, it's the best money you'll ever spend.

A QoE report also speeds up the deal. When buyers see you've already done the work, they move faster through diligence. Their advisors can focus on confirmation rather than discovery, which keeps momentum going and reduces the chance the deal falls apart.

Document Everything So the Business Runs Without You

Buyers don't want to buy a job. They want to buy a business. If you're the only person who knows how to run operations, deliver the service, or manage key client relationships, your business is worth a lot less.

I learned this the hard way on my second exit. The buyer kept asking, "What happens if you get hit by a bus?" I didn't have good answers, and it killed my multiple.

Start documenting every process in your business. I'm talking step-by-step SOPs for:

• Customer onboarding and fulfillment
• Sales process from lead to close
• Marketing campaigns and content creation
• Product development and bug fixes
• Financial close process
• Customer support workflows

Use something simple like Notion or Google Docs. The format doesn't matter. What matters is that someone could read your documentation and execute the task without asking you questions.

Hire or promote someone to run day-to-day operations at least 6-12 months before you plan to sell. This proves the business can operate without you. During due diligence, you want to show that you're barely involved in daily decisions.

Build Recurring Revenue and Reduce Customer Concentration

Buyers pay premiums for predictable cash flow. A $2M ARR SaaS company is worth more than a $3M revenue agency where every dollar has to be re-earned each month.

If you run a service business, shift toward retainers and recurring contracts. Even if you can't go full SaaS, having 60-80% of revenue locked in via monthly retainers makes you infinitely more attractive to buyers.

Customer concentration is a massive red flag. If your top three clients represent more than 30% of revenue, you have a problem. Buyers will either discount your valuation heavily or require earnouts tied to retention of those accounts.

Start diversifying your customer base years before you sell. Land more smaller clients. Expand into adjacent markets. Do whatever it takes to spread risk across a broader base.

The same applies to lead sources. If 80% of your revenue comes from one marketing channel or one referral partner, buyers see that as a dependency risk. Build multiple acquisition channels that generate consistent pipeline.

If you're building prospect lists at scale, having legitimate infrastructure matters. Tools like ScraperCity's B2B database show buyers you have real, defensible lead generation systems-not just manual processes that die when you leave.

Get Your Cap Table and Legal Structure Clean

Messy equity and legal structures kill deals. I've seen acquisitions fall apart in due diligence because the founder had verbal agreements with early employees that never got documented properly.

Make sure every equity grant, option pool, and shareholder agreement is documented and filed correctly. If you promised someone equity but never gave them actual shares, either formalize it or renegotiate before you start the exit process.

Work with a good corporate attorney to review your:

• Operating agreement or bylaws
• Shareholder agreements and cap table
• Customer contracts and terms of service
• Employment agreements and non-competes
• Intellectual property assignments
• Any outstanding litigation or disputes

Buyers will request all of this during due diligence. Having it organized in advance signals that you run a professional operation.

If you have multiple entities or a complicated structure, consider simplifying before you go to market. The cleaner the structure, the faster the deal moves.

Understand Your Valuation and What Drives It

Valuation is not a mystery. For most small businesses, you're looking at a multiple of EBITDA or revenue, depending on your industry and growth rate.

Service businesses typically sell for 2-4x EBITDA. SaaS companies with strong growth and retention can fetch 4-8x revenue or 20-40x EBITDA. E-commerce brands usually trade at 2-4x EBITDA depending on margins and concentration risk.

What drives multiples higher?

• Growth rate: 30%+ YoY growth commands a premium
• Retention: Low churn and high net revenue retention in SaaS
• Margins: Higher profit margins mean better multiples
• Systems: Less owner dependence and better documentation
• Market position: Defensible niche or category leadership

Get a professional business valuation from a firm that specializes in your industry. This gives you a realistic baseline and helps you identify gaps to address before going to market. Recent data shows that 60% of business owners have had their business formally valued within the last two years-up dramatically from just 18% a decade ago.

Don't fall in love with your own number. I see founders convince themselves their business is worth 10x because they read about some unicorn exit. The market doesn't care about your effort. It cares about cash flow and risk.

Understanding industry-specific multiples is critical. Financial services companies might trade at 7-12x EBITDA. Professional services firms typically see 5-10x. Technology and SaaS businesses often command the highest multiples because of their recurring revenue models and scalability.

Address the Five D's That Force Unplanned Exits

Half of all business exits happen because of what advisors call the "Five D's": death, divorce, disability, disagreement, and distress.

These are the unplanned exits that destroy value. When you're forced to sell quickly because of health issues, partnership disputes, or financial crisis, you have zero leverage. Buyers smell desperation and lowball you accordingly.

This is why you need a contingency plan even if you're not ready to sell. What happens if you get sick tomorrow? Who takes over operations? How do partners or family members get bought out? What's the business worth if you had to sell in 90 days?

Document succession scenarios. Have buy-sell agreements in place with business partners. Make sure your life insurance covers enough to buy out your equity if something happens to you. These aren't fun conversations, but they protect the value you've built.

The emotional component of letting go is real. I've watched founders lose their minds during transition periods because they can't handle seeing someone else run their baby. If you're not prepared for that psychologically, no amount of money will make the exit feel good.

Build Relationships With Buyers Before You're Ready to Sell

The best exits don't happen on the open market. They happen through direct relationships with strategic buyers who already understand your business.

Start attending industry conferences and building relationships with potential acquirers 2-3 years before you plan to exit. Have coffee with people who run businesses adjacent to yours. Get to know private equity firms that buy in your space.

These relationships take time to develop. When you eventually decide to sell, you want to be able to pick up the phone and have real conversations with people who already respect you and understand your market.

I sold two of my companies through warm introductions, not through a broker process. The deals moved faster, the terms were better, and the buyers already had conviction before we even started formal diligence.

Strategic buyers-companies in your industry looking to expand-often pay more than financial buyers because they can capture synergies. They might combine your sales team with theirs, use your product with their customer base, or eliminate duplicate overhead. Those synergies justify higher multiples.

Decide Whether You Need a Broker or Advisor

For deals under $1M, you can probably sell without a broker. Post on Flippa or reach out to your network directly.

For deals between $1M and $10M, a good M&A advisor or business broker is worth the commission (typically 10-15% for smaller deals, 3-5% for larger ones). They'll run a proper process, manage buyer communications, and negotiate better terms than most founders can get on their own.

For deals over $10M, you want an investment bank. They have relationships with institutional buyers and can run a competitive process that drives up your valuation.

Choose someone who specializes in your industry and deal size. Ask for references and talk to at least three founders they've represented. Find out how long deals took, what percentage of asking price they achieved, and whether the earnouts actually paid out.

A good advisor does more than find buyers. They prepare your business for market, help you tell your story, manage the data room, negotiate terms, and keep deals moving when they stall. They've seen hundreds of transactions and know which issues kill deals versus which ones are just noise.

Prepare for Due Diligence Before You Go to Market

Due diligence is where deals die. Buyers find skeletons, lose confidence, and either walk away or renegotiate down.

Run your own internal due diligence before you start marketing the business. Organize everything into a virtual data room using Dropbox, Google Drive, or a proper due diligence platform.

You should have ready access to:

• Three years of financial statements and tax returns
• Customer list with contract values and start dates
• Churn data and cohort analysis
• Employee list with roles, compensation, and agreements
• Marketing analytics and CAC/LTV data
• Product roadmap and technical documentation
• All legal agreements and contracts

If you run an outbound sales operation, make sure your lead sources are documented and defensible. Buyers want to know exactly how you're generating pipeline. Having scalable systems in place-whether that's email finding tools or database access-proves your acquisition model isn't dependent on manual work that leaves with you.

The faster you can answer questions during diligence, the more confident the buyer becomes. Slow responses signal disorganization, and disorganization kills deals.

Buyers will also want to understand your sales process end-to-end. If you've built a repeatable framework for discovery calls and client onboarding, document it. I cover how to structure these systems inside my discovery call framework.

Structure the Deal to Minimize Tax and Risk

How the deal is structured matters as much as the headline number.

Asset sale vs. stock sale makes a huge tax difference. Buyers usually prefer asset sales. Sellers usually prefer stock sales. Your accountant and attorney need to be involved in these negotiations.

Earnouts are common in smaller deals. The buyer pays you part of the purchase price upfront, and the rest over 1-3 years based on the business hitting certain milestones. I hate earnouts, but sometimes they're necessary to bridge a valuation gap.

Data shows that earnouts typically comprise 10-25% of middle-market purchase prices, with the median earnout period running 24 months. In life sciences, earnouts can be 61% of total consideration because of the uncertainty around FDA approvals and product development milestones.

If you agree to an earnout, make sure the metrics are objective and within your control. Revenue-based earnouts are better than profit-based earnouts because buyers can manipulate expenses. They can load the business with corporate overhead, cut marketing spend, or increase salaries-all of which kill profitability while you're trying to hit your earnout targets.

Never accept earnout terms where you have no visibility into performance or decision-making. If you're not staying on to run operations, structure the earnout around retention metrics or revenue maintenance rather than growth targets you can't influence.

Some earnout structures include floor guarantees-minimum payments regardless of performance-which reduce your downside risk. If a buyer is pushing for a big earnout, negotiate for a 50% floor so you get something even if targets aren't met.

Seller financing is another structure where you basically loan the buyer part of the purchase price. This can increase the pool of potential buyers, but it also means you're taking on risk. If the buyer runs the business into the ground, you might not get paid.

Know When to Walk Away From a Bad Deal

Not every offer is worth taking. I've walked away from three acquisitions that looked good on paper but had red flags I couldn't ignore.

If a buyer is being evasive about their financing, walk. If they're pushing for earnouts above 40% of the purchase price with metrics you can't control, walk. If they refuse to honor your existing team or customer commitments, walk.

The worst thing you can do is accept a bad deal because you're tired of running the business. I've seen founders take lowball offers with terrible terms because they were burnt out and just wanted out. Six months later, they regret it.

Remember: you only get one shot at selling your business. If you accept the wrong deal, you can't undo it. Take your time, get multiple offers, and don't be afraid to stay independent if the terms aren't right.

Sometimes the best exit is no exit. If buyers aren't valuing your business appropriately, keep building for another 12-24 months. Improve your metrics, diversify your revenue, reduce dependencies, and come back to market stronger.

Plan for Life After the Exit

Nobody talks about this, but selling your business is emotionally harder than you think. You've spent years building this thing, and suddenly it's gone.

Have a plan for what's next before you close the deal. Are you starting another company? Taking time off? Moving into investing?

Data shows that 42% of exiting owners plan to retire, 39% intend to start another business, and 31% want to pursue philanthropy or civic engagement. For 70% of business owners, income from the business is essential to maintain their lifestyle-so make sure your exit proceeds actually support your financial needs.

If the deal includes a transition period where you stay on for 6-12 months, be realistic about whether you can handle working for someone else. I've seen founders lose their minds trying to take orders from a buyer who's changing everything they built.

From a practical standpoint, think about where your next network and deal flow will come from. If you want to start another business, having systems documented helps you move faster. The frameworks I teach inside my 7-Figure Agency Blueprint are built on lessons from multiple exits.

And if you're not sure what to do next, join a community of operators who've been through it. The transition period is lonely, and talking to people who understand what you're going through makes a massive difference.

The Bottom Line on Business Exit Planning

Selling a business isn't complicated, but it does require intentional preparation. Start years in advance, not months. Build the kind of business someone actually wants to buy: clean financials, documented processes, diversified revenue, and minimal dependence on you.

The founders who get the best exits aren't the ones with the best businesses. They're the ones who make it easiest for buyers to say yes.

Focus on reducing risk, proving consistency, and demonstrating that the business has real systems that work without you. Commission a quality of earnings report before you go to market. Get your cap table clean. Document your processes. Build relationships with potential buyers years before you're ready to sell.

Do that, and you'll have buyers competing for your company instead of the other way around. That's how you maximize your exit value and actually get the outcome you deserve after years of building.