Most business owners do not start their businesses with a clear plan for how they will eventually exit. However, those who successfully scale their companies and secure premium valuations often begin with the end in mind. Exit planning is a strategic process that goes beyond simply quitting; it is about creating options for the future. Whether a business owner intends to sell, remain involved, expand, or step aside, preparing a company to thrive independently is a critical strategic move.
Exit planning encompasses increasing a business’s value, sustainability, and transferability. It prepares owners for various scenarios such as selling, passing ownership to family or employees, merging with another company, or attracting investors. More importantly, it provides a framework for making informed decisions that support future goals today.
Data from the Exit Planning Institute (2023) indicates that approximately 80 percent of businesses do not sell, often because they lack readiness. Common challenges include unorganized financial records, weak systems, and insufficient leadership structures. Exit planning addresses these gaps, shifting the narrative from unpreparedness to opportunity.
The optimal time to initiate exit planning is generally two to five years before a planned transition. However, the most effective approach treats the business as if it could be sold at any moment. This mindset encourages better operational discipline and strategic focus. McKinsey & Company (2022) found that businesses with formal exit strategies tend to outperform peers in valuation and resilience, highlighting the financial and risk management benefits of early planning.
There are several common paths for business exit, each with distinct implications. These include third-party sales to buyers such as competitors or private equity firms; internal transitions involving family members or employees; mergers designed to scale or enter new markets; public offerings or recapitalizations involving external investors; and liquidation, typically considered a last resort. The appropriate path depends on the owner’s objectives and business model.
Failure to engage in exit planning can result in a founder becoming the bottleneck, reducing business value due to dependency on their involvement, unclear financial documentation, or lack of recurring revenue. For example, Sara Blakely, founder of Spanx, maintained complete ownership while implementing documented systems and brand clarity, making the company appealing to Blackstone. In 2021, Blackstone acquired a majority stake in Spanx at a valuation of $1.2 billion (Forbes, 2021). This case exemplifies how proactive planning can enhance business attractiveness and valuation.
Into The Next offers business owners services that resemble those employed by private equity firms post-acquisition, but are delivered before a sale and for the founder’s benefit. The firm specializes in scaling businesses efficiently while maximizing sales value. Their approach includes strategic planning, financial optimization, operational streamlining, and leadership development to reduce risk and stress.
Alejandra Santos, founder and CEO of Into The Next and host of the Scale to Exit podcast, brings her expertise as a CEPA and vast experience over 16 years of helping businesses scale lean and exit smart. She leads the team in crafting and implementing methodologies designed to accelerate value creation and position companies favorably for target buyers.
Among the strategies promoted by Into The Next to scale lean and exit smartly are systematizing operations through documented standard operating procedures and trained teams; ensuring clean, Generally Accepted Accounting Principles (GAAP)-compliant financial records; diversifying risk by avoiding overreliance on single clients, products, or personnel; building a capable leadership bench that enables the business to operate independently of the founder; and managing the company as if it is already acquired, using key performance indicators and disciplined execution to foster a sellable asset.
Exit planning should be considered an integral element of business management rather than a mere procedural step. By building value, freedom, and optionality, business owners position themselves to capitalize on future opportunities regardless of the timeline. Whether the planned exit horizon is eighteen months or eight years, initiating this process promptly is advisable. Successful business exits are typically the result of intentional design rather than chance.
Successful business exits are typically the result of intentional design rather than chance. For more information on how Into The Next Consulting can assist businesses in navigating the complexities of tariffs, market expansion, operational efficiency, scaling lean, or executing smarter exits, visit Into The Next Consulting. Additional resources and updates are available via the company’s LinkedIn, Instagram, and Podcast platforms, alongside a dedicated Media Page.
References:
- Exit Planning Institute. “The State of Owner Readiness.”
- McKinsey & Company. “The Power of Planning for a Business Exit.”
- Forbes (2021). “Spanx Founder Sara Blakely Sells Majority Stake to Blackstone at $1.2 Billion Valuation.”
- Harvard Business Review. “Creating a Business That Can Thrive Without You.”
