Exit planning for business owners

Exit planning is not the sale itself; it is the runway you build before the sale. The value levers that move your price the most all happen before a buyer ever sees your numbers, which is why the work should start two to three years out. The two that matter most are clean financials (two to three years of accrual-based statements with owner add-backs documented) and reduced owner-dependence, because a business that cannot run without you is worth less and is harder to transfer.

A good plan starts from your number, not the business's number. Estimate after-tax proceeds and compare them to what you actually need to retire or move on. A business typically sells for about 2-4x SDE if it is smaller and owner-operated, or 4-8x EBITDA if it is larger and professionally managed; a quick valuation tells you whether there is a gap to close before you exit. Remember the headline price is pre-tax: federal long-term capital gains run roughly 15-20%, plus state tax, and the 3.8% net investment income tax can apply to higher earners, though generally not to gain from a business you materially participate in, so many owner-operators land nearer 20% federal.

From there you choose a path: a third-party sale (to an individual buyer, a private-equity platform, or a strategic acquirer), a sale to your management team, an employee ownership plan, or an internal family/partner transition. Each carries different price, speed, and tax outcomes. DealSeam supports owners pursuing an off-market sale, introducing them to qualified buyers where there is a fit; it is not a traditional business broker, and because it earns a buyer-paid success fee, sellers pay nothing.

Use the runway to fix what a buyer will discount: customer concentration, missing systems, key-person risk, and messy books. Each issue you resolve before going to market both raises the multiple and lowers the odds the deal falls apart in due diligence.