Setting Your Business Exit Timeline

In business, as in life, it’s tempting to put off decisions that feel overwhelming. But here’s the hard truth: you can’t waste time waiting for the “perfect moment” to start crafting your business exit timeline because there’s truly no better time than the present. The longer you delay, the fewer options you have, and the more stressful the process becomes. 

The good news is that setting up your timeline doesn’t have to be complicated, and you don’t have to do it alone. Many business owners find tremendous value in working with an exit coach, a certified professional who knows how to help them prepare their businesses for sale, succession, or transition. 

Are you not quite ready to hire an exit coach? You should still start on the preliminary work—like defining your business exit timeline—so that you’re prepared to hit the ground running when the time comes to bring in an expert. 

Step 1: Define Your Target Exit Date

The foundation of any successful business exit strategy is clearly knowing when you plan to leave. It needs to be an anchor that keeps you from drifting too far off course, not something permanent and immovable. You just want to create a framework for how long you have to prepare for your transition. 

A good place to start is by asking yourself, “What will my life be like after I leave the business?”

• Are you retiring to enjoy more personal time?
• Are you planning to start another venture?
• Do you envision staying involved in some capacity, or is it a clean break?

Your answers to these questions will help you bring your biggest priorities into focus. If you’re aiming to retire in five years, your business exit timeline will look much different than if you’re aiming to sell and reinvest within the next two. 

What If I’m Not Sure About the Date?

Sometimes, putting your finger on an exact date still feels too daunting. No worries! Instead, use a range as your guide– “I’d like to exit within the next 3-5 years.” Then, you have more flexibility while still giving yourself some frame of reference to work with. 

What If I’m Not Ready to Exit?

Not being ready to exit is a good thing because if you were planning to transition in the next 6-8 months, it probably wouldn’t go very smoothly. The whole point is to have a plan on hand today so you’re not rushing to sell under less-than-ideal circumstances. 

Remember, the timeline is yours to adjust. Life happens, and plans change, but at least you’ll know that you’re working towards reaping the rewards of your entrepreneurial investment.

Take Action!

When psychologist Dr. Gail Matthews of the Dominican University of California conducted a study on commitment and goal achievement, she found that those who wrote their goals down were 42% more likely to achieve them than those who did not.  

So, let’s start by writing down your tentative exit date. It can be in your planner, on a sticky note on your desk, or tacked up on a bulletin board—as long as you write it down!

Step 2: Break the Timeline Down Into Manageable Phases

Because the tasks in your exit timeline build on one another, skipping a step can create bottlenecks that slow down everything that follows. For example, if you have an interested buyer but haven’t completed an updated business valuation, you won’t be able to move forward with meaningful negotiations until that critical piece is in place.

Breaking your timeline into phases helps you avoid these delays by organizing the larger process into logical, manageable steps. As each phase builds on the last, you’ll have the confidence of knowing that you’re always ready for what comes next. 

The Preparation Phase

First, you’ll want to start cleaning house, focusing on things like increasing your business’s value and tightening up operations. Go into it knowing that your future buyers will examine it under a microscope during the due diligence phase. Everything must be squeaky clean and picture-perfect to make a good impression. 

Priorities during the preparation phase include:

• Conducting a valuation so you know your business’s current worth and what factors are driving or holding back your value. 
• Getting your financials in order with standardized reporting that demonstrates your business’s performance at a glance. 
• Taking an honest look at areas where you can boost profitability. 
• Considering how you want your transition to look. Is it succession? Selling? ESOP? Whichever business exit strategy you choose, you’ll want to keep it in mind throughout your time as an owner. 

This phase should take the longest because the earlier you begin, the more time you’ll have to make impactful changes. Ideally, every business owner would start the preparation phase the day they open their doors, but starting now is just fine, too!

The Transition Phase

At this point, your path will diverge depending on your exit strategy.

If you’re passing the business to a family member, the focus may be on preparing them for leadership. On the other hand, if you’re liquidating, your efforts will be on settling debts while extricating the most value you can. 

The steps we outlined here should be thought of more as general guidelines that you tailor to fit your unique circumstances.

• Delegate key responsibilities to leaders or team members who will remain post-exit.
• Train successors on everything they need to know about your operations, financials, vendors, employment practices, etc. 
• Discuss roles and expectations for the post-transition leadership team.
• Document all critical operations.
• Create a clear decision flowchart that outlines how choices will be made and by whom
• Gradually ease away from day-to-day operations while still keeping an eye on things. 
• Work with your legal and financial advisors to ensure accurate documentation is accessible to the right people. 
• Lean on your leadership team and exit coach for guidance when you run up against roadblocks.

The Exit Phase

After all the years of preparation, the final phase is where it all comes to fruition. It’s the moment when all of the groundwork you’ve laid over the years pays off, and you can transition away from your role as owner into whatever comes next. 

When all of the contracts are signed and financial obligations fulfilled, you’ll have an opportunity to turn your focus inward. Stepping away from your business is an exciting but bittersweet milestone, and while you may not feel like celebrating now, you should feel proud of the legacy you’re leaving behind. 

Reaching that milestone successfully doesn’t happen by chance. It requires a well-executed plan that keeps you moving forward and building value. 

As a Certified Exit Planning Advisor, Lori Moen of Catalyst Group ECR has the expertise to meet you exactly where you are in building your business exit timeline, whether you’re just starting to think about the future or hitting a hurdle in an exit already underway.

Your business deserves an exit strategy that reflects your efforts to build it, and contacting Lori is the best way to get there.