The Art of Leaving: When to Exit Your Business

Andrew Rettie

Business Information, Leadership, Planning, Time, Transition

There's an art to leaving and timing when to exit your business to get the outcome you want.

Understanding the Best Time to Plan Your Business Exit

“When is the best time to…?”

This is a multifaceted question which everybody grapples with at some point in their lives.

The ability to answer such a question infers there is a ‘knowing’ – it is something you can answer, or others with knowledge or wisdom can answer.

‘When’ is about the actual timing and ‘best’ infers significant benefits, or the maximum benefits possible for acting at a certain time (or inferior benefits or penalties for not acting at that time).

Actioning your decision is the ‘doing part’ – presuming you decide to act.

Common Life Questions: From Business to Personal Choices

Here’s a number of variations of these types questions we often pose in our business and life:

When is the best time to start a business?
When is the best time to hire staff?
When is the best time to appoint a CEO?
When is the best time to buy a property?
When is the best time to propose?
When is the best time to start your family?
When is the best time to eat healthy and exercise more?
When is the best time to retire?
When is the best time to plan your business exit?

Navigating the Complexities of Timing Your Business Exit

Have you ever asked yourself or others, any of these questions?

Has anyone ever asked you any of these questions?

Were you confident in your answer or did you feel somewhat unsure that your answer would help the person who asked?

Answering these questions involves a combination of psychological, social, economic, and environmental factors.

That is what makes them a challenge. It can be hard to answer them for yourself, far less someone else.

Assessing Personal Readiness to Exit Your Business

Of course, some questions are easier or quicker to answer, than others.

For example, most of us appreciate that eating more healthily and exercising more is a no- brainer to gaining and maintaining better health.

So the answer to ‘when is the best time’, is simply NOW! And yet we don't act, even though we are surrounded by ample information, research and role models.

Well, if it was so obvious, why don’t millions of people do it?

Is it knowing or deciding?

Personal readiness plays a substantial role.

Readiness is a state, affected by your emotions, beliefs, relationships, health and wellbeing, social and cultural influences, as well as how your life stage affects your decision-making.

When individuals feel mentally and emotionally prepared, they are more likely to make decisions with conviction and commitment. And the opposite is also true – when they don’t feel mentally or emotionally prepared, they avoid making decisions and taking action.

So the answer to ‘when is the best time’, is simply NOW!

Strategic Timing: Pinpointing the Right Moment to Exit Your Business

For you as a business owner, there is an important question you need to answer - ‘when is the best time to plan your business exit?’

The purpose of planning is to help you identify your goals and what you need to do to get you there.

There are 2 parts to that question;

when is the best time for the business, and
when is the best time for you, the owner.

Research shows that planning your business exit early is both wise and highly beneficially.

Simply put, owners who have a plan obtain a higher value for their business which can be anywhere from 30% to 100% more than if they don’t have a plan.

Furthermore, research conducted by KPMG and PwC in conjunction with various other institutions, indicate 85% of Australian businesses don’t have an exit plan. Therefore, only 15% of businesses are answering the question and acting with intent.

Early Planning: A Crucial Element in Exiting Your Business

Timing is of the essence. If planning occurs late i.e. when the business is about to go to market, most of the benefits will be lost.

What is meant by ‘early’?

From the business’s perspective, early can be at the point of inception.

As the saying goes, don’t start something unless you know how it is going to finish.

Racing car drivers will tell you the same thing for every corner on the racetrack - you need to enter the corner based on how you want to exit it.

True entrepreneurs and venture capitalists, for example, have a game plan. They work out why it is valuable to get in and when. And they have a definite strategy for when to exit the business or get out. They look at the business from an investor standpoint, not just as an operator.

If you are like most business owners, you probably started your business with the intention of being a part of the operations of the business.

For you and others like you, early, will be, at a minimum 3-5 years before you want to exit. That may be because retirement is looming or because of other personal priorities – in other words, it is driven by your personal perspective, life stage or circumstances.

Aligning Personal and Business Goals in Exit Strategy

In essence, planning needs to take into account factors that drive timing for both the business and you, personally. Aligning them creates the best outcome.

Overcoming Barriers in Business Exit Planning

While we are all aware of strategies for better health such as eating better and exercising more, what is obvious is not always the route we take. Why is that?

In terms of personal preparedness and decision-making, as the research has shown, most business owners are leaving their business exit outcomes to chance – whether that is done consciously or unconsciously.

If it is being done consciously, the business owner is aware that it is important and chooses not to decide or act.

If it is being done unconsciously, there are most likely issues or roadblocks preventing the business owner from effectively deciding and tackling the topic in the first place.

There are several potential causes or contributing factors, which create blindspots in thinking or diminish energy and creativity such as:

Emotions – primarily fears and uncomfortable situations which are actively being avoided
Experiences and beliefs that undermine confidence or are projected into the future, thus preventing action
Lack of independent thinking – being tied to social narratives or what others think you should do – ‘what they think is normal’
Stress which interferes with effective and confident decision-making
Anxiety – much of it driven by the burden of responsibility and accountability, which can isolate business owners
Overwhelm which dims any sense of the future
A reluctance to see a different future and build a new identity

You may resonate with one or more of these conditions at some time in your business journey.

What is important is when it comes time for you to exit your business, that you are able to create your plans, prepare your business and execute what is necessary from the highest level of thinking, energy and creativity to ensure you maximise your exit potential and returns.

"Align your personal vision with your professional goals, and watch as doors you never thought to knock on begin to open." - Unknown

Preparing for Life Beyond Your Business: Planning Your Exit Strategy

Five to seven years from now you will surely arrive somewhere – the question is where?

Will you be the same person then as you are now? Or who will you become?

The past has been ‘written’ or is behind us. There is nothing we can change about it. And, the future is ours for the choosing.

It is up to us to create a future where we have no regrets. And creating that future takes a conscious decision about what we want, why we want it and how we will go about it.

Utilising Support Systems for Successful Business Exit: The Role of Masterminds

For a business owner contemplating selling or exiting their business, freeing up time and energy to be present for this next phase, and having a like-minded peer group or mastermind can be a valuable gift.

Being a business owner can be tough, time consuming and quite often lonely.

Do you have a trusted group to confide in and support you in this new phase as you decide ‘when to exit your business?’

Have you freed up time and space to allow yourself to tune into and trust your inner guidance system?

The more you tune out the world and tune into you, the louder your guidance becomes.

Answering tough questions doesn’t have to be done in isolation – you just have to find your own inner circle or council of trusted advisors.

Here's a question to ponder:

Are you waiting for the perfect moment to plan your exit, or is the perfect moment waiting for you?

About the Author

Andrew has over 40 years of experience spanning Business Transformation, Management, Mergers & Acquisitions, Business Strategy, and Leadership. All with the purpose of driving business growth, enhancing performance, developing people and teams, elevating business value, and ensuring smooth transitions.

As well as being an FCPA he is involved in mentoring up-and-coming CPAs as a way of sharing his knowledge and expertise. In 2022 he co-authored an international best-selling book: Elevate Your Performance.

Andrew Rettie

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