When Should You Start Planning Your Business Exit? (Hint: It's Sooner Than You Think)

Many business owners assume exit planning is something to worry about “later” — once they’re closer to retirement, or once the business hits a specific milestone. But waiting too long to plan your exit can reduce your options, lower your valuation, and leave you reacting instead of leading. 

The reality is: the best time to start planning your exit is years before you think you’ll need to. 

Whether you plan to sell, transition to family, or pass the torch to key employees, your exit is one of the most financially and emotionally significant decisions you’ll make as a business owner. 

Exit Planning Is a Process, Not an Event 

Think of exit planning as preparing your business — and yourself — to be ready, not just willing. That process takes time. The businesses that attract strong buyers, command higher valuations, and lead to smoother transitions are the ones that have been deliberately prepared for exit over a period of years, not months. This doesn’t mean you need to decide today how or when you’ll exit. But it does mean having a strategy in place, and reviewing it regularly.  

Why Sooner Is Better 

Here are four reasons to start now — even if you’re not planning to step away any time soon: 

1. You Build Leverage, Not Urgency  If an offer comes out of the blue — or life circumstances force your hand — you'll want to be prepared. Having a plan in place means you can negotiate from a position of strength rather than pressure. 
2. You Can Shape the Business Around a Future Buyer  Different exit paths (third-party sale, internal succession, family transition) require different structures, teams, and timelines. Planning early gives you the flexibility to prepare accordingly. 
3. Tax Efficiency Takes Time to Structure  Extracting wealth from your business, minimizing tax on a sale, or implementing estate freezes and holding companies are all strategies that require foresight and alignment across tax, legal, and financial planning. 
4. You De-Risk the Business by Making It Owner-Independent  The more your business can run without you, the more valuable and transferable it becomes. That shift doesn’t happen overnight — it takes leadership development, systems, and trust. 

 Common Misconceptions About Business Exit Planning 

• “I don’t know who I’ll sell to yet.”  That’s okay — planning is about creating options, not committing to one. 
• “I’m too busy running the business to think about leaving it.”  That’s exactly why you need a plan. A business that depends entirely on you won’t be worth as much when you’re ready to exit. 
• “My family will probably take it over.”  If that’s your plan, start having honest conversations now. Not all successors want to lead — and not all are ready. Training, governance, and clarity are essential. 

 What Early Business Exit Planning Looks Like You don’t need to overhaul your business all at once. Start with these practical steps: 

• Get a baseline valuation to understand what your business is worth today — and why. 
• Review your shareholder agreement to ensure it reflects your future intentions. 
• Begin documenting systems and processes to reduce dependency on any one person. 
• Assess your financial goals: how much will you need from your exit, and what lifestyle will that support? 
• Meet with your CPA and advisors to align tax, legal, and financial strategies. 

 The Bottom Line: Exit Planning Is Good Business Planning 

Even if you never “exit” in the traditional sense, this kind of planning builds a stronger, more resilient company. It improves profitability, reduces risk, and creates clarity — for you, your family, your employees, and potential buyers. So, when should you start planning your exit? 

As soon as you care about the outcome.