Owning a small business is one of the most empowering ways to take control of your future. It offers independence, financial opportunity, and the satisfaction of building something from the ground up.
But no matter how successful or passionate you are, the day will come when it’s time to step away.
That’s where an exit strategy comes in.
An exit strategy is more than just a plan to leave your business—it’s a blueprint for preserving your legacy, protecting your financial future, and ensuring a smooth transition for everyone involved. Yet, despite its importance, many business owners delay this critical planning step until it’s too late.
The Importance of Planning Ahead
Many entrepreneurs are so focused on daily operations and growth that they neglect to think about retirement or succession. But the reality is, every business owner will eventually exit—whether by choice or by circumstance.
Retirement, new ventures, health issues, or even unexpected life events can all trigger the need for a transition. Without a plan, the process can be chaotic and costly. With one, it becomes a strategic move that benefits you, your family, your employees and your customers.
Exploring Your Exit Options
There are several ways to exit a business, each with its own implications. Some owners choose to sell to an external buyer, which often yields the highest financial return. Others prefer to pass the business on to a family member, a trusted employee, or a co-owner. Mergers, liquidations, and even involuntary exits due to death or disability are also possibilities.
The right path depends on your personal goals, the nature of your business, and your timeline. What matters most is that you begin thinking about these options well in advance — ideally five to ten years before your intended exit.
Preparing for Retirement
The first step in planning your exit is envisioning your life after business. What does retirement look like for you? Where do you want to live? What kind of lifestyle do you hope to maintain? These questions help define your financial needs and guide your planning process.
Once you have a vision, it’s time to evaluate your business. A professional business valuation will give you a clear picture of what your company is worth. This includes analyzing profitability, assets, liabilities, market trends, and future earning potential. Understanding your business’s value is essential for negotiating a sale or planning a transfer.
At the same time, you’ll want to create a personal financial plan. Many business owners have most of their wealth tied up in their company. Diversifying your investments and securing other sources of income can provide stability and peace of mind.
Building Your Support Team
Exiting a business is a complex process that requires expert guidance. Surround yourself with a team of professionals who can help you navigate the legal, financial, and operational aspects of your transition. This team might include an attorney, a CPA, and a business valuation expert.
These advisors can help you explore your options, structure deals, minimize tax exposure, and ensure that your exit aligns with your long-term goals.
Tools for a Smooth Transition
Several tools can make the transition smoother. A buy-sell agreement, for example, clearly defines the course of action if an owner exits unexpectedly. This agreement can help avoid potential disputes among heirs or business partners, safeguarding the continuity and stability of the business.
A formal succession plan is also essential, especially for family-owned businesses. It ensures that the next generation is prepared to lead and that the transition is fair and well-structured. In some cases, a gradual sale or gifting strategy can help ease the shift while managing estate taxes.
Leaving on Your Terms
Exiting your business isn’t just about walking away—it’s about doing so with intention and confidence. With the right strategy, you can protect what you’ve built, support your loved ones, and embrace the next chapter of your life.
Start planning today. Because when the time comes, you’ll want to leave not with regrets, but with pride in everything you’ve accomplished—and excitement for what lies ahead.
Ursula Scroggs, CPA, is managing director at DKSS CPAs + Advisors, with offices in Troy and St. Clair Shores, Michigan. Jean Stenger, CPA, is director of operations for DKSS.
