My co founders think we should wait until we are ready to sell next year to start putting together our exit plan. Why is a multi year runway necessary if our current operational performance is already strong?

Question

Tyler Smith · Accepted Answer

Waiting until the year you want to sell to start exit planning is a critical mistake that costs owners millions of dollars in lost value. Exit planning is not a transaction transaction; it is a strategic management system that takes years to execute properly. A three to five year runway is necessary because it takes time to clean up financials, transition key relationships, and build a self sustaining leadership team. If you rush the process, you will likely go to market with unresolved key person dependencies, messy customer concentration, or unoptimized tax structures. Furthermore, preparing for an exit actually makes your business easier to run and more profitable today. By starting your runway early, you improve the quality of your business immediately, which gives you the freedom to make decisions on your own terms. Whether you decide to sell in three years or keep the business for ten, building an exit ready company gives you ultimate control over your future.