10 Ways to Prepare a Business for Exit

Exiting a business is one of the most important milestones in an owner’s journey. Yet many owners fail to achieve the outcome they want because they haven’t invested time in proper exit planning. A well-prepared exit strategy doesn’t just increase the value of the business – it also makes the transition smoother for buyers, employees, and the owner themselves.

If you’re thinking about selling your business or planning your succession, here are 10 practical ways to prepare your business for exit.

1. Sever the Emotional Connection

Many business owners struggle to detach from their company because it represents years of dedication and sacrifice. But to maximise value, you need to view your business as a commercial asset, not as “your baby.” Buyers are looking for strong returns, growth potential, and low risk not sentiment. By treating your business as an asset, you’ll make better decisions that drive valuation and create a more attractive proposition for investors or acquirers.

2. Clean Up the Balance Sheet

A cluttered balance sheet is a red flag for potential buyers. Remove personal assets from the company’s accounts and resolve contingent liabilities such as long service leave or annual leave accruals. A “clean” balance sheet signals financial discipline and makes due diligence easier, giving prospective purchasers greater confidence in the numbers. This step is essential in succession planning and can directly influence the purchase price.

3. Put a Detailed Plan Together

Failing to plan is planning to fail – and this is especially true when preparing to sell a business. Your exit strategy should cover timelines, valuation targets, succession options, and how you’ll use sale proceeds to fund retirement or your next venture. A clear plan also helps align your team, advisors, and potential buyers around the same objectives.

4. Enlist the Help of External Specialists

Engaging professional advisors might feel like an unnecessary cost, but in reality, it’s one of the smartest investments you can make. Accountants, corporate lawyers, exit planning advisors, and investment bankers can help you structure the deal, reduce tax leakage, and negotiate the best terms. Their expertise often adds multiples of value to the sale price.

5. Take Your Time

Exiting a business is not a quick process. Ideally, you should allow 12 to 24 months to properly prepare before going to market. This timeframe allows you to resolve issues, strengthen systems, diversify income, and demonstrate consistent performance – all factors that increase buyer confidence and business valuation.

6. Move Out of the Business

If you’re still deeply involved in the day-to-day running of your company, now is the time to step back. Start shifting your focus from operational tasks to strategic direction. Buyers want businesses that can run without the owner at the centre of every decision. By building a strong management team and delegating effectively, you’ll make your business far more attractive and sustainable.

7. Reduce Over-Reliance on Specific Clients

If more than 15% of your revenue comes from a single client, you carry significant concentration risk. Buyers see this as dangerous because the loss of one client could materially affect the business. To prepare for exit, spread your revenue across multiple clients and strengthen your contracts to reduce customer churn.

8. Diversify Your Income Streams

Businesses with diverse and recurring revenue are valued higher. Annuity income, subscriptions, or service contracts reduce risk and make future earnings more predictable. If your current revenue is largely transactional or one-off, consider building new streams that lock in long-term clients. This not only stabilises cash flow but also lowers the business’s risk profile.

9. Minimise Reliance on Business Owner(s)

In many SMEs, the owner is also the top salesperson or rainmaker. While this may have helped you grow the business, it’s a major problem when you exit. If revenue depends on you personally, buyers will be reluctant to pay a premium. Instead, build a capable sales and delivery team who can drive revenue independently. This reduces risk and increases your company’s multiple.

10. Systematise the Business

A business that runs on systems not people – is a business that can be scaled and sold. Document and, where possible, automate every process, policy, and procedure. This makes the company less dependent on individuals, ensures consistency, and increases its appeal to investors. A well-systematised business signals resilience, efficiency, and scalability – all factors that boost valuation.

Final Thoughts

Preparing your business for exit is not something to leave until the last minute. By taking these steps early, you’ll not only maximise the value of your company but also create a smoother transition for employees, clients, and the new owner. Whether you’re planning to sell in two years or ten, the best time to start preparing is now.

If you’d like expert guidance on succession planning, exit strategy, and business valuation, Succession Plus specialises in helping owners achieve successful exits on their own terms.