Listen instead on your Monday Morning Drive:

When meeting new business owners, I ask direct questions: How did you get started? Where are you now? What concerns you most? What’s your exit strategy?

The answers to the lattermost question follow predictable patterns. Business owners over 50 usually say, “I’ve thought about it, but I don’t have one,” or “I really need to come up with one.”

The younger crowd responds differently: “I’m having fun and making money. I don’t need to think about my exit strategy now. I’ve got 20–30 more years.”

Both responses make me uncomfortable.

The Accidental Entrepreneur’s Dilemma

Most of us didn’t start with a business plan. We didn’t visit the Small Business Administration or hire a coach. We followed our passion and suddenly found ourselves managing employees, debt, leases, and maybe even a business-related mortgage.

Now, we scramble to generate revenue to keep our business moving. We push aside questions about where we want to be five, 10, or 20 years from now — even if we should have asked them 20 years ago.

Why I Always Ask

The exit strategy question tells me what drives someone. When a business owner in their late 30s dismisses exit planning, I dig deeper:

• Do you expect your kids to join the business?
• Do you have a passion outside of work?
• Are you truly an entrepreneur, or did you land here by circumstance?
• Are you really a video engineer, salesperson, or event producer at heart?

People open up. They share dreams of traveling, pursuing passion projects, or building empires through acquisitions. These are great answers — but they need direction.

The HGTV Myth

The most painful conversations happen with owners my age. They’re approaching retirement and say, “I need to exit my business in two years,” or “I’ve set my retirement date and need to monetize my business somehow.”

My response? “You’re late.”

Many of these owners think of selling their business like home sellers on HGTV: “If I put money into improvements now, I can list for more!” They want to spend two, three, or five more years making the business “more sellable.”

These owners give buyers too much credit. Buyers don’t care about your process improvements or new revenue streams. What really matters is cash flow over the past three to five years.

This is completely different from selling a house. House buyers purchase based on the property’s current condition — they won’t pay extra for your specific pool choice. But businesses need years of improvement to show value.

That’s why owners in their 60s or approaching 70 have fewer options than younger owners. The time and effort needed for significant improvements won’t deliver a good ROI. We need a different approach:

• What does your retirement look like?
• What does your financial planner recommend?
• Could you retire at a slightly lower level and buy back five years of life?

Stay on Course

My client base has shifted. During the pandemic, I talked with many owners who started their businesses in the ’80s and early ’90s. Now I mostly work with younger owners who launched or took over in the last 10 years — and yes, these owners still need to think about exit strategy.

I spent years as a dinghy sailor. Without fancy equipment like compasses and depth finders, we lined up trees and radio towers across the lake to stay on course. Waves, currents, and winds pushed us off track — that’s the fun of sailing. But we needed to measure the drift and adjust our direction.

Exit strategy works the same way. If you plan to sell your business someday — whether that day is 10, 20, or 40 years in the future — you must work yourself out of daily operations.

You as the owner need to become surplus to operations. That’s what makes a company sellable.

The Producer’s Problem

Imagine a 40-year-old business owner who lives for tactical work. He loves being on show sites, producing events, calling shows, and running crews. Exit strategies are tricky for owners like him — they must grow beyond hands-on work to see themselves elsewhere.

Some owners never grow out of it. That’s fine. We can explore other paths:

• Build a lifestyle business
• Find someone else to run operations
• Keep one foot in shows while developing management skills

The key? Set clear goals and balance these competing interests.

The Private Equity Reality

The 20–30 age group surprises me. They think about exit strategies more than the 30–40 crowd. Owners in the older group often say, “Sure, I have an exit strategy: someone will pay me lots of money in five years.”

That’s not a strategy. That’s wishful thinking based on stories from previous generations.

The days of massive roll-ups and public stock offerings are gone. That happened in the ’90s, with another attempt in 2005–2007 before the market crashed. Today’s roll-ups involve finding larger private equity investors.

Most owners balk at the private equity conversation: “Someone else will control my company? My equipment budget will drop from 12% to 3%? That’s not how this business works!”

Private equity isn’t all bad. Their model — acquiring companies and creating economies of scale through volume — can work. But they want to get paid as they go.

They won’t bet everything on the outcome. They need to cover expenses, adding another cost most companies can’t afford.

The Profit Factor

Every exit strategy discussion leads to one point: How profitable can you make your company?

Focusing on profitability forces owners to take a hard look at long-standing practices:

• Keeping original employees past their value-add
• Maintaining outdated skill sets
• Postponing necessary changes

I hear it often: “I can’t let go of this employee. He’s been with me since the beginning.” Great, but he’s not adding value to your business. “I know, I know. But it’s not time yet. Maybe when a buyer comes…”

In my era, we didn’t upgrade people because our business model worked. Keep doing shows, keep the experienced staff, and everything stays fine.

That doesn’t work anymore. We have to complete shows at half our previous overhead costs. We can’t keep staff indefinitely. We need the right people for optimal performance.

The Buyer’s Perspective

“I’ll find someone who wants to buy my company.”

Maybe. But what if your ideal buyer finds a company that’s already scalable? One doing a million dollars of revenue per full-time employee? One that costs twice as much but generates four times your cash flow?

Buyers might see you as a bargain fixer-upper. They might clean house or fold you into their scalable organization. But what deal will they offer you?

Take Action Now

Think about your exit strategy. Consider the long term, and remember that your current profitability determines your future exit options.

Don’t bet on next year being great. Don’t assume revenue increases will automatically create profit. Challenge these assumptions.

Meet with your stakeholders. Have honest conversations about your goals and how to reach them. Your exit strategy matters now. It will develop better because you planned proactively.

Want to discuss your exit strategy? Let’s talk.