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  • Writer's pictureMiller Glover

The Exit Planner's Blog: Measuring Your Path to a Successful Exit

Greetings fellow business owners and entrepreneurs,

As an exit planner, CPA, and outsource CFO, I've come to appreciate the significance of metrics in running a business. After all, there's an old saying that goes, "You cannot manage what you cannot measure." As we navigate the intricate world of business ownership, we constantly seek answers to questions like:

How much? How soon? How efficient? How productive? How intelligent? And, most importantly, how do we measure these aspects of our businesses? In this blog post, I'll be focusing on six key exit metrics that every business owner should not only measure but also monitor as they plan for their eventual exit.

Exit Metric #1 – How is My Relationship with My Future Owner?

Before we can answer the question, "How is my relationship with my future owner?" we must first identify who that future owner is likely to be. If you're unsure about the identity of your future owner, then this is the first metric you need to focus on. Start by asking yourself a simple question: Who would want to own your business after you? If several companies or individuals come to mind, that's a good sign. However, if you currently have no solid answers, it's crucial to address this gap. Without knowing who would want to own your business after you, it's challenging to design your business with any intention regarding its future ownership and management.

Exit Metric #2 – Do I Know the Range of Values for My Business and Can I Afford My Desired Exit?

For many privately-held business owners, their businesses are the primary source of funding for their lifestyles. This includes not only W-2 salaries and distributions but also the perks that come with being the boss. If you're unsure whether the value of your business, once sold to your future owner, will be enough to sustain your desired lifestyle, it becomes difficult to plan your exit effectively. This situation is further complicated by the fact that privately-held businesses have various potential exit values, depending on the future owner. Understanding these numbers is a critical metric for achieving a successful exit.

Of course, there's always the option of continuing to work and generate income after your business exit. However, many business owners have dedicated a lifetime to building their businesses and may not see "needing to work" as a satisfying outcome after their exit. For more thoughts on this topic, refer to Exit Metric #5.

Exit Metric #3 – Have I Prepared My Key People for the Transition?

We must acknowledge that our positions as business owners are a result of finding, hiring, training, and retaining talented individuals. No one succeeds alone, and the same applies to your exit plan. Often, owners fear the consequences of informing their key personnel about an impending change in ownership. However, there are two reasons and ways to approach this conversation. First, discuss the fact that you're getting older and won't be around forever, emphasizing how your key people's careers are tied to your decisions. Second, recognize that injecting new energy, capital, and management might help the business reach its full potential. These conversation starters pave the way for discussing a future transition, without necessarily divulging specific timing. The aim is to prevent the loss of key personnel as a result of your exit. Keep in mind that money alone, such as retention bonuses, is rarely enough to retain valuable employees. It's far more effective to engage in honest, open-ended conversations, fostering trust between your key personnel and the future owner.

Exit Metric #4 – Is My Personal, Company, and Market Timing Aligned?

Achieving alignment between three critical factors—your company's performance, your personal timeline, and the external market conditions that support your exit—is no small feat. When these three areas are in sync, you'll maximize your exit value and find the optimal timing for the transaction, regardless of who the future owner might be. A key aspect of successful timing is understanding market cycles and allowing ample time for personal and business planning. By regularly monitoring and assessing this metric, you'll gain confidence and traction in your exit planning. While it's essential to tackle day-to-day business challenges, it's equally important to look ahead and within, seeking answers to your timing concerns.

Exit Metric #5 – Do I Know What I'm Going to Do Next?

This metric is all about avoiding seller remorse. If you don't have an answer to the question, "What am I going to do next?" you're overlooking a significant part of your exit planning. Assuming that you'll feel happy and fulfilled once you no longer own your business underestimates the impact your business has on your life, keeping you active and productive. To address this, try a simple exercise: Create a blank calendar and start filling it with the activities you would engage in during your newfound free time after the business exit. Once you move past recreational activities and delve into meaningful pursuits that bring you joy and purpose, you'll be well on your way to knowing what you're going to do next. Regularly revisit this exercise every few months, seeking fulfillment and purpose in productive activities outside of work. Monitor this metric closely to enjoy the fruits of your exit transaction without the pain and remorse of letting go.

Exit Metric #6 – Have I Assembled a Team to Help Me Through My Exit?

Going it alone can be perilous to your wealth. Exiting a business entails such complexity that even seasoned professionals who have bought and sold numerous businesses avoid doing it alone. Building a team of trusted, trained, and competent advisors is crucial to your success. Start assembling that team today, remembering that the time and money invested in planning is an investment in safeguarding your wealth for yourself and future generations. Executing a long-term plan with a team of professional advisors is the cornerstone of achieving your exit transaction and personal goals. Begin finding those who can help you today.

Concluding Thoughts

By embracing these six exit metrics (Relationship with future owner; Range of business values and affordability of desired exit; Preparedness of key personnel for transition; Alignment of personal, company, and market timing; Clarity on post-exit plans and activities; Assembly of a competent team of advisors for a smooth transition), you'll track your progress and start focusing on the essential aspects of your exit, aligned with your personal goals. Like any goal-setting endeavor, ensure these metrics are documented and refer to them frequently. Over time, you'll realize that measuring and managing these exit metrics empowers you with a process that fosters exit thinking, ultimately leading to tailored solutions for your unique needs and goals. I hope this blog post has provided you with valuable metrics to consider as you delve deeper into your business exit planning journey.

Warm regards,

Miller Glover

Exit Planner, CPA, Outsource CFO

As well, if you are interested in measuring your level of readiness to exit your business then please take a few minutes and fill out one of these surveys.


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