Exit planning is often framed as a future concern or avoided altogether. But reframing it as value creation can bring leaders clarity and peace of mind, even if you’re not ready to make your move just yet.
CEOs have learned to anticipate risk. They scenario-plan. They hedge. They prepare for disruptions they hope never arrive. Yet when it comes to their own businesses, many take a very different approach. Instead of planning, they wait. Instead of preparing, they hope: that the timing will be obvious. That the market will cooperate. That they will “know when it’s time.”
According to the Cornerstone study ‘Selling Your Business’, which surveyed 750 business owners running companies with US$5 million to US$100 million in revenue, more than four in ten plan to run their business “until they are physically or mentally unable to continue”.
That’s not a strategy – it’s a crisis waiting to happen.
The reason exit planning gets postponed
Market volatility gets blamed a lot. Interest rates. Election cycles. Lending conditions. These are all genuine considerations, but they’re not the real reason most CEOs delay exit planning. Identity is.
Nearly two-thirds of owners in the study said their identity is deeply tied to their business. That’s not surprising when you consider that 76 percent founded their companies themselves, and another 16 percent inherited them from family. These businesses weren’t bought, they were birthed and built over decades.
When a company represents leadership, purpose and status, exit planning can feel less like a financial exercise and more like an existential one. Who am I if I’m no longer the CEO? What replaces the structure, the relevance, the daily decisions?
So instead of engaging the question, many leaders defer it. “I’m not ready yet.” “The business is doing too well.” “I’ll deal with it later.”
Later, unfortunately, has a habit of arriving uninvited.
The danger of ‘I’ll know when the time is right’
One of the most telling findings from the study wasn’t about when owners want to sell but how little preparation they’ve done. Only about one-third have taken any formal steps to plan a sale, even though the majority (64 percent) expect to exit in the next five years, and 81 percent within the next decade.
The gap between intention and preparation is where value quietly erodes.
Health events happen. Partnerships fracture. Family dynamics change. Economic conditions shift. Industry consolidations accelerate. In exit planning circles, we often talk about the “Dismal Ds” that force unplanned transitions: death, disability, divorce, distress and disagreement.
According to the Exit Planning Institute, roughly half of business owners exits are driven by one of these difficulties rather than by a deliberate, well-timed plan. When exits are forced or approached from a place of fatigue or upset, owners lose leverage, options and often value.
The most important number
If there’s one clear data point in the Cornerstone study that speaks to a lack of exit planning, it’s this: More than 60 percent of owners have never had a real market analysis or valuation of their business.
Many rely on informal estimates, average multiples, conversations with peers, quick calculations with advisors or assumptions based on past deals. The problem is that markets don’t price businesses based on sentiment or effort. They price based on risk, cash flow, structure and shifting market dynamics.
Running a company for decades without understanding its real market value is like sending a child through school without ever seeing a report card. You may feel confident. You may even be proud. But you’re missing objective feedback until it’s too late to course correct.
Getting a real market analysis and knowing what your business is worth isn’t about selling tomorrow. It’s about understanding today, especially in a mergers and acquisitions environment shaped by factors no CEO controls: interest rates, buyer appetite, access to capital and industry consolidation trends.
Exit planning isn’t about leaving; it’s about clarity. The irony is that real planning often reduces the pressure CEOs feel.
When owners understand three numbers – their company’s real market value; what they would net after taxes and fees; and what their desired lifestyle actually requires – clarity replaces anxiety.
Some discover they already have enough. The business could sell tomorrow and fund both time and freedom. Others discover a wealth gap larger than expected and, critically, discover it early enough to do something about it.
Both outcomes are wins. What isn’t a win is being surprised.
Leadership doesn’t end at the exit
The best CEOs don’t wait for clarity. They create it. Exit planning isn’t an admission of fatigue or disengagement. It’s an extension of leadership, protecting employees, preserving legacy and ensuring the value created over decades isn’t left to chance.
Too many business owners don’t plan their exit – they hope it one never comes.
The most successful leaders do something different. They plan early, not because they’re ready to leave, but because they care too much about their family’s future to leave it to chance.
Opinions expressed by The CEO Magazine contributors are their own.
