How exit planning for business owners really works, and why it starts years before the sale.
- Begin exit planning at least three to five years before a sale; seven to 10 if the business still depends on the owner day-to-day.
- Early preparation widens the range of buyers and structures an owner can realistically consider.
- It starts with a personal financial plan, because a sale price only means something measured against the number the owner actually needs.
In less than a decade, roughly six million small and medium-sized businesses in the U.S. will face ownership transitions as their baby boomer owners retire, according to the McKinsey Institute for Economic Mobility in its 2026 report “The Great Ownership Transfer.”1 Underneath that number looms an eye-opening reality: the vast majority of small-business exits end in closure, not sale. Most owners who could sell a growing business instead watch it disappear, the consulting firm warns.2
What separates the owners who sell from those who shut down usually isn’t the quality of the business. It’s timing — and how early they start planning the sale.
Why do business owners put off exit planning?
Most owners delay exit planning because nothing forces the issue. There is no tax deadline, no annual filing and no calendar reminder that says “start exit,” so the decision stays optional until something else makes it urgent.
We count many business owners as clients and help a lot of them prepare for a sale. An owner can run a healthy, profitable business for another five years without ever touching the question of what happens when they stop. Then a health scare, a partner’s sudden retirement, or simple exhaustion turns “someday” into an urgent “now.”
The best time to start planning to sell was years ago. The second-best time is today.
How active is the market for business sales in Florida?
We often work with Florida business owners, and the deal activity in the region is robust. In 2025, Florida logged nearly 600 announced deals — one of the most active transaction environments in the country, according to mergers and acquisitions (M&A) firm William & Wall in its Florida Deal Insights report.3 The wave of baby boomer sales has started. If a business owner is thinking about a sale, they’ll want to be positioned at the front end of the wave, while there’s money chasing deals, not at the end.
Start with your personal financial plan, not the business valuation
Before valuing the business, an owner needs to know the number that funds the life they want afterward. Without that figure, there is no way to judge whether an offer is good, only whether it sounds big.
Nearly every business owner who tells us they want to sell is surprised when our response is, “Great. Let’s start with your personal financial plan.” They expect us to begin with the business. We don’t.
Until the owner knows the number they need to maintain for the kind of lifestyle they want, they can’t evaluate an offer. If a founder could walk away with 80% of the business’s value by selling to employees, would that figure enable the founder to achieve their future lifestyle? Or does the owner need to sell to private equity — an investor that buys companies with the intention of selling them later at a higher price — to hit top dollar? Those questions are impossible to answer without doing the personal planning first.
We’ve seen this play out. When we first sat down with one owner, the expected sale price of their business was $80 million to $90 million, and that may sound like a fortune, but not to someone with a $10 million to $20 million-a-year lifestyle. Over several years, the client sold a plane and made other spending adjustments while the business grew in value. Eventually, the owner’s financial needs and the sale price lined up. That only happened because we started with the personal plan instead of the deal.
How long does it take to prepare a business for sale?
Three years is the minimum, and five years is better. If the business still depends on the owner day-to-day with no management team ready to step in, that timeline stretches to seven to 10 years.
Sometimes we hear a client muse, “I’m probably going to sell in five years.” We suggest they start working backward from that exit date to figure out what has to happen between now and then. Internal succession often takes longer than owners expect because developing, and sometimes replacing, a successor can take years.
The math doesn’t change much for an external sale. If a founder’s timeline is five years, they should already be working with an M&A specialist, getting financials in order, and building the materials used to market the business to buyers.
Your exit planning timeline: what to do and when
| Time before sale | What to do |
| 10+ years | Build a personal financial plan; learn your real number |
| 7-10 years | Develop successors; strengthen the management team |
| 3-5 years | Hire an M&A attorney; engage your accountant; put tax tools in place; clean up financials; reduce key-person risk |
| 12 months | Finalize the ownership structure |
| Sale | Close the transaction |
What do buyers look for in a business?
Buyers look for a business that runs without its owner: client relationships tied to the company rather than one person, financials reviewed by an outside accounting firm, and a management team likely to stay after the sale.
Once the personal plan and a realistic timeline are in place, we tell owners to apply a kind of golden rule of selling a business: step into the buyer’s shoes and think about what they would want to see.
A prospective buyer might pass on a business where every client relationship runs through the owner personally. What about a business operating on books that are “clean enough,” and kept by the owner’s niece? Most buyers want an outside accounting firm to review and sign off on books.
That’s why we advise that the first two calls after an owner says: ‘”I think I’m ready to sell” should go to the business owner’s accountant and M&A attorney. Part of the attorney’s job, early on, is to be the bad guy — telling the owner what a prospective buyer will actually see, not what the owner assumes they’ll see.
Why tax planning has to start years before a sale
Most of the tax structures that reduce what an owner owes on a sale have to be in place years before closing, not months. Some require a first step in the current tax year to work on the owner’s intended timeline at all.
A client recently mentioned his sons are capable of taking over his business, and he’s planning to sell to them — but not for another three years. The obvious next step is an installment sale, a structure that spreads the sale price, and the tax on it, across several years. The problem is an installment sale to suit his timeline requires a portion of the business to be sold this year to hit a three-year target. That also means his accountant needs to understand that end goal immediately, not next year or in a couple of months. Acting now, rather than waiting, is what allows those tax tools to deliver their full benefit to the owner and his sons.
The bottom line
Buyers are active, well-capitalized, and looking. The businesses they want, more often than not, are in the hands of owners who haven’t started planning. The sooner that changes, the more control an owner keeps over how the story ends, and the more of what they built survives the transition. That’s the role we play: bringing together the M&A attorney, the accountant, and our own estate planning team, and keeping them all anchored to the personal financial plan. Reach out, and let’s start the conversation.
Frequently Asked Questions
- When should a business owner start exit planning?
Three years before an intended sale is the minimum, and five years is better. If the business still depends on the owner day-to-day, plan on seven to 10 years to build a management team that can run it without them. - Why does the personal financial plan come before the business valuation?
At minimum: an M&A (mergers and acquisitions) attorney, the owner’s accountant, a financial advisor holding the personal plan and an estate planning attorney. The first two calls after an owner decides to sell should go to the accountant and the M&A attorney. - What makes a business hard to sell?
Client relationships that run through the owner personally, financials that haven’t been reviewed by an outside accounting firm, no management team ready to step in and tax structures left until the year of the sale.
Sources
- The Great Ownership Transfer: A new era of business stewardship (McKinsey Institute for Economic Mobility)
- The Great Ownership Transfer: A new era of business stewardship (McKinsey Institute for Economic Mobility)
- Florida Deal Insights (William & Wall)
Disclosures
Gryphon Wealth, LLC is an investment adviser registered under the Investment Advisers Act of 1940. Registration as an investment adviser does not imply any level of skill or training. For more information, visit adviserinfo.sec.gov and search for our firm name.
This material is presented solely for informational purposes and has been gathered from sources believed to be reliable; however, the adviser cannot guarantee the accuracy or completeness of such information. Nothing in this presentation is intended to serve as personalized investment, tax, or insurance advice. Advisory services are only offered to clients or prospective clients where the adviser and its representatives are properly licensed or exempt from licensure.
Opinions expressed are based on economic or market conditions at the time this material was written. Economies and markets fluctuate. Actual economic or market events may turn out differently than anticipated. Any opinions expressed are current only as of the time made and are subject to change without notice.
The article discusses tax outcomes related to the sale of a business. It is not tax advice. Please consult your tax advisor regarding your specific situation.
Client examples described in this article are included for illustration. They are not testimonials, do not describe investment performance and should not be taken as representative of any other client’s experience.
Past performance is not indicative of future results. This article was created with the assistance of artificial intelligence as part of the research and drafting process.