Exit Planning: Why Start Today?

Whichever way you look at it, you will leave your business at some point.

Exit planning isn’t something you can afford to put off. Wait too long, and you might find yourself stuck with a low offer or a buyer walking away.

Plan early, and you’ll set yourself up for a smoother ride to the finish line.

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Start Planning Sooner Rather Than Later

Life’s full of surprises, and not all of them are good. Whether it’s a co-founder clash, an unexpected departure, a separation or worse—grief or illness—these curveballs can force a sale when you least expect it.

If you’re unprepared, you’ll scramble to make things work. But start early, and you’ll have the luxury of time to adapt, refine your strategy, and even ride out market fluctuations.

Planning ahead ensures that you can meet opportunities with confidence, not panic. Don’t fall into the trap of “We’ll think about it later.”

On the FounderMetrics podcast, expert Trevor Stevenson-Platt suggests a three-to-five-year prep window as ideal, but hey, if you can start today, you’re already ahead.

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Types of Exits and Their Implications

Knowing your options means you can build the best exit strategy for your business goals. Here are a few common routes:

• Trade sale – When you sell to a competitor or an industry buyer.
• IPO – You take your business public.
• Management buyout – Your leadership team buys you out.

Each option comes with different tax and operational implications. By mapping out your ideal exit strategy early, you’ll make life easier when it’s time to pull the trigger.

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Valuation and Maximising Business Value

Ah, valuation. It’s the elephant in the room. Every business owner dreams of a high price tag, but what the market is willing to pay might be a different story. Buyers want proof that your business can deliver profits and steady growth.

Here’s what you need to nail:

• Profitability – Sustainable, repeatable profits are a goldmine to buyers.
• Recurring revenue – Predictable income streams mean less risk.
• Benchmarking – How does your valuation stack up against others in your sector?

Improving these factors steadily over time will make your business irresistible when the time comes to sell.

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Leadership Team and Operational Readiness

If you’re the glue holding everything together, you’re also a liability. Buyers want to see a capable leadership team in place—one that can carry the business forward without you.

The solution? Start building and empowering your team today. Share responsibilities. Get them prepared to shine. This not only lowers risk but also signals stability and scalability—the magic ingredients for higher valuations.

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Common Mistakes in Exit Planning

Heads-up, here are pitfalls to avoid:

• Starting too late – You’ll be rushing and probably miss chances to maximise value.
• Messy cap table – Poor equity management can scare off buyers.
• Inflated expectations – Thinking your business is worth more than it is can kill deals.

And here’s a sobering stat: only about 20-30% of businesses that go to market actually sell. That’s why early preparation matters. Be the exception, not the rule.

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Future Wealth Management

An exit isn’t just the end; it’s the beginning of your next chapter. What’s your plan for the wealth you’re about to generate? If you don’t have one, you could find yourself fumbling with taxes and missed opportunities.

Consider these steps:

• Work with financial advisors to protect and grow your capital.
• Explore diversified investments to secure your future.
• Think about generational wealth strategies if that’s your goal.

The last thing you want is to work hard for decades only to see your legacy whittled away by poor planning.

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Smart Ownership Structure = Smooth Transition

A clean equity structure makes your business more attractive to buyers.

No one wants to deal with tangled ownership disputes during due diligence. While we’re on the subject, get a co-founder prenup. It won’t necessarily prevent future heartache but it may minimise the pain.

Platforms like Vestd help simplify this process, giving you control over your cap table and transparency for all stakeholders. This sets you up for a smoother transition when it’s time to exit.

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Final Thoughts

Here’s the deal: you will exit your business someday. Whether by choice or necessity, it’s going to happen. By starting now, you’ll have more control over the outcome, more opportunities to maximise your value, and fewer regrets.

Don’t wait for the perfect time—start planning today. Future you will thank you.

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The Vestd team, content and app can help you make informed decisions. However, any guidance and support should not be considered as 'legal, tax or financial advice.'