The Airplane Analogy That Explains Everything
You can't fly over the runway and cut throttle, hoping the plane lands safely. That's not how aviation works. And it's not how business exits work either.
A successful landing depends on the final approach—the deliberate, methodical preparation that happens long before the wheels touch down. The approach determines altitude, speed, angle, and alignment. Everything must be precisely calibrated. If the approach is wrong, no amount of desperate maneuvering during landing will fix it.
A sudden exit is like a sudden landing. It rarely ends well.
Most business owners treat exit like an unexpected event that will be figured out when it happens. When health issues emerge, a retirement deadline arrives, or an unexpected buyer appears, they scramble to prepare. The result is what economists call a "distressed sale"—a transaction driven by urgency rather than strategy.
The difference between owners who maximize exit value and those who leave millions on the table isn't luck. It's preparation. Years of it.
Why Your Financials Alone Won't Get Top Dollar
Here's the misconception that costs small business owners the most money: the belief that strong financials equal maximum exit value.
You have a profitable business. Your balance sheet looks good. Revenue is growing. Profit margins are solid. You assume that when a buyer comes along, they'll see these impressive numbers and offer top dollar.
This is where most owners get blindsided.
A buyer is not purchasing your financial statements. They're purchasing a business that can generate those financials without you running it.
Your financials prove what your business has done. A sophisticated buyer cares about what it will do—under new leadership, without your relationships, without your decision-making, without your presence.
What buyers are really evaluating:
Can this operation run without the founder?
If not, your business is dependent on you personally. They're not purchasing a business—they're purchasing a job. And jobs are worth significantly less.
Are revenues real and repeatable?
Or are they dependent on your relationships and personal reputation? Can your team execute the same quality of work?
Are processes documented and executable?
Or does everything live in your head? Can a new manager step in and operate without constantly asking you for context?
Is the management team capable of running this without you?
Do you have a documented organizational structure? Can second-level managers lead? Will they stay under new ownership?
Is the cost structure sustainable?
Or are you running at margins that only make sense because you're not paying yourself a market salary?
These questions require deep evaluation of operations, systems, people, and structure. This is what buyers assess during due diligence. If your business is dependent on you, valuations get discounted by 30%, 40%, or even more.
The Due Diligence Reality: What Buyers Actually Investigate
When a buyer moves into due diligence, they're not confirming what they already believe about your business. They're testing it. Aggressively.
Financial Integrity
Are your numbers accurate? Do your financial statements reflect normalized operations? Are there hidden liabilities?
Revenue Quality
Is revenue sustainable? Can it be verified through contracts? High customer concentration is a massive red flag.
Operational Sustainability
Can existing managers run it? Is there documented succession planning? Will key employees stay?
Risk Visibility
Known risks can be priced in. Unknown risks discovered during diligence derail deals or terminate them.
Growth Sustainability
Are projections realistic and based on documented market data? Unrealistic forecasts create skepticism.
Preparation reduces surprises. Surprises derail deals or create valuation adjustments.
The Case for Starting Your Final Approach 3-5 Years Before Exit
The biggest mistake business owners make is starting exit preparation too close to the actual sale. They give themselves 6-12 months to fix problems that actually require 2-3 years to address properly.
Benefits of Starting Early
Address operational dependencies gradually
Over three years, you can systematically document processes, train managers, delegate decision-making, and build the organizational structure needed to run without you.
Financial consistency becomes visible
If you've been consistently maintaining clean, normalized financial statements for three years, it proves that's how you actually operate.
Issues can be addressed proactively
You might even increase valuation by 15-25% through operational improvements over the preparation period.
You maintain control
Early preparation means you decide when to sell, to whom, and under what conditions.
Market timing improves
You're not forced to sell in a down market. You can wait for favorable conditions.
What Buyers Are Really Testing
When due diligence begins, buyers are running a comprehensive evaluation:
Financial accuracy and sustainability—Can revenue be verified? Can profit margins be sustained?
Customer relationships and contracts—Are they transferable? What's the churn rate?
Employee capability and retention—Can the team execute without you?
Operational systems and documentation—Can a new manager follow documented processes?
Legal compliance and issues—Pending lawsuits? Tax problems? Regulatory violations?
Asset condition and infrastructure—Are physical assets well-maintained?
Competitive position and sustainability—Is the business defensible?
If your preparation has been solid, due diligence becomes confirmation rather than investigation. If preparation has been weak, due diligence becomes discovery of problems—and problems mean discounts.
The Numbers That Matter in Exit Preparation
Higher valuations for prepared businesses
Compared to unprepared businesses in the same industry and financial position.
Owner dependency discounts
A business heavily dependent on the founder sees significant valuation discounts.
Customer concentration discounts
When one customer represents 40% of revenue.
A Realistic Expectation About Timeline
Exit preparation takes longer than most owners expect. Plan for:
| Phase | Timeline |
|---|---|
| Foundational preparation (getting operations ready) | 2-3 years |
| Marketing and buyer identification | 6-12 months |
| Due diligence and negotiations | 3-6 months |
| Closing | 1-3 months |
| Total: Decision to Close | 3-4 years |
Businesses that have been methodically prepared for 3+ years sell faster, at higher valuations, with fewer surprises.
The Strategic Advantage: You're Not Desperate
A business owner who has spent three years preparing for exit has an enormous advantage: They don't need to sell right now. They can wait for favorable conditions. They can be selective about buyers. They can walk away from bad deals. They're negotiating from strength.
A business owner who prepares six months before exit is essentially negotiating from desperation. They need the deal to close. Buyers sense this. Valuations reflect it.
Early preparation buys you flexibility, control, and leverage. That's worth real money.
Taking the First Step
If you're years away from exit, the first step is simple: Get a professional business valuation. Not to establish a price—to establish a baseline and understand what drives your value.
Use that valuation as a strategic planning tool. What would increase it? What creates risk? What needs to improve? Now you have a roadmap for the next 3-5 years of exit preparation.
If you're closer to exit, the work is more intensive. Tools like BizHealth.ai can help conduct a comprehensive assessment of your business across 12 critical areas—financial health, operational maturity, customer concentration, management capability, technology infrastructure, and more.
The business owners who maximize exit value aren't the ones with the biggest businesses or the best financials. They're the ones who understood that exit value is created through methodical preparation, not through last-minute scrambling.
The Bottom Line
A successful business exit isn't determined by the sale process itself—it's determined by how well you prepare for it. Start now, prepare methodically, and you'll have control when the time comes to sell.
Your final approach determines your landing value. The preparation happens years before the transaction closes.
