Exiting Your Business Is Inevitable: Keys to a Successful Transition



“… I don’t believe your business is your life, though it does and can play a significantly important role in your life. But before you can determine what that role will be, you must ask yourself these questions: What do I value most? What kind of life do I want? What do I want my life to look like, to feel like? Who do I wish to be?” – Michael Gerber, E-Myth


The only person that can determine with 100% confidence that your business transition was successful is YOU! This is your view of what matters and if the transition measured up to what you had envisioned. There may be quantitative factors that help compare the price you sold your company at and what other companies have sold for in your industry. However, valuation metrics are just one part of a transition. What are all the things that a business owner should consider?

Peter G. Christman is an exit coach that has spent his life helping business owners develop a plan to transition with the greatest success possible. He created a business transition concept that describes three legs of the stool in his book, The Master Plan.  The goal was to help visualize the three areas that will help define a successful transition. He stated that all successful transitions need to align personal, financial and business goals. In addition, he adds his value systems chart to include additional viewpoints for each leg. He explains that it’s important to determine how your goals for each leg are impacted by your role as a family member, manager and owner.




What are you going to do with your free time? Is your self-worth/self-identity tied to your business? Are you physically able to do the things you really enjoy? Do you have family members in the business and how will this decision affect them? Are there any philanthropic activities you would like to pursue?


What are your income requirements after you transition? Do you know the value of your business and the factors that impact value? Now that you don’t have the business to fall back on, does your risk tolerance change? What are your insurance needs (life, health, disability…)?


How is the business performing? Is the business salable? Is there too much reliability on you or key employees? Does the business rely on certain customers or suppliers too much? What is the future outlook for the industry?

This may seem overwhelming and for one individual to do all of this, it would be difficult. This is where we suggest putting a plan together and getting the right people to help.



Start with creating an advisory team and include all facets that impact your personal, financial and business goals. Every business owner will have a different set of advisors that are important to their goals, some of which would include family members, attorney, CPA, wealth advisor, banking advisor, insurance specialist, and valuation analyst.



Next, complete a personal, financial and business assessment. This should include an analysis of what life after the business transition looks like and if you’re ok with that transition now. This can be an eye-opening experience because for most business owners they have never really thought about what life would be like without the business.

The financial assessment projects your future based on factors as of now. Without going through this assessment, how will you know what amount of money you need to enjoy retirement? For most business owners, a substantial part of their nest egg is tied to their business’s worth. Therefore, we would recommend performing a business valuation to see what the current market would pay for your business.

The business assessment takes a fresh look at your business and what makes it salable. Think about when you first got into your business, what were the factors that were important to you and do they still exist. We recommend reviewing all important relationships in your business. These include but are not limited to family members, employees, customers, suppliers, competitors and advisors. Then conduct a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis to see what is within your control and what is not.

As best as possible, capitalize on the opportunities within your control so when you are ready to transition, the business will be in the best possible position to maximize value. Recognizing factors outside of your control are just as important because then you can focus your time and energy into more impactful aspects.



Once you have compiled this data you can start to put a plan together to combat areas that you feel fall short of your goals of a successful transition. We also would recommend putting a contingency plan together just in case you are not able to fulfill all of your goals before a transition. This way you will be protecting your family and business through a transition to the next owner.



Lastly, set goals for yourself and your advisors so there is accountability. We would suggest you review your plan often with your advisory team. This isn’t a one-time plan that you put in the drawer to pull it out when you want to transition. This is a living breathing plan that can change and more than likely will evolve, as you and your business change. All the time and money spent on preparation is to give you the comfort that when that day comes and you inevitably transition your business, you can say I was prepared and it was successful!    


Ryan McGregor




Ryan McGregor is a Consulting Director at Lutz M&A with a combined 14 years of related experience. He specializes in business consulting, valuation, and sell-side advisory services.

  • Alliance of Merger & Acquisition Advisors, Member
  • National Association of Certified Valuators and Analysts, Member
  • Certified Merger & Acquisition Advisor
  • Certified Valuation Analyst
  • BSBA in Management, University of Nebraska, Kearney, NE
  • Master of Investment Management and Financial Analysis, Creighton University, Omaha, NE
  • Master’s in Business Administration, Creighton University, Omaha, NE
  • Past volunteer for various local nonprofit organizations including: Juvenile Diabetes Research Foundation (JDRF), Habitat for Humanity, Red Cross and Open Door Mission


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