These are the most common questions business owners ask about exit planning. Every answer is based on our experience working with growth-stage companies doing $1M to $50M in revenue.
Frequently Asked Questions
When should I start exit planning?
Start exit planning 3-5 years before you want to exit. The businesses that sell for the highest multiples are the ones that have been optimizing enterprise value systematically for years, not the ones that decide to sell next quarter. Even if you are not planning to sell, exit planning makes your business more valuable, more resilient, and more enjoyable to run.
What is a value gap analysis?
A value gap analysis compares your current enterprise value to your potential enterprise value and identifies the specific changes that would close the gap. It evaluates eight value drivers: revenue growth, profitability, customer diversification, recurring revenue, team depth, systems and processes, competitive moat, and market position.
What reduces the value of my business?
The biggest value killers are owner dependency (business cannot run without you), customer concentration (one customer is 20%+ of revenue), lack of recurring revenue, no documented processes, key person risk, deferred maintenance, and unclear intellectual property ownership. Each of these reduces your multiple by 0.5-2x EBITDA.
What is owner dependency?
Owner dependency means the business cannot function without the owner for more than 30-90 days. If you hold key client relationships, make all major decisions, or are the primary salesperson, buyers see that as risk and discount the valuation. Reducing owner dependency is the single highest-impact action most founders can take to increase enterprise value.
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