Your exit options close before you decide to sell

Are you planning to get the business ready for sale once you have decided to sell it?

It sounds efficient. There is no point dressing a business for a buyer who may be ten years away, not while there is a business to run this week.

The trouble is not the work you leave until later. It is the choices that close while you wait. By the time you decide, most of the big decisions — who can buy it, on what terms, and when — have already been made. By default, by you, years earlier.

"When should I start getting ready to sell?" is the exit question I hear more than any other. Almost every owner asks it about three years later than they should.

Preparation is how you keep the choice

Most owners think of sale preparation as polish. Tidy the numbers, sharpen the story, appoint a broker. That work is real. It just isn't the point.

The point is choice. A business like yours has several possible buyers, and each one needs something different, built over years rather than months.

• A trade buyer. Wants clean accounts with a track record behind them, and customer contracts that transfer to a new owner without a phone call from you.
• Your own staff. Need a manager who already runs the place, and a business steady enough to keep paying while they buy you out in instalments.
• Family. Needs a successor who was trained, not appointed, and a clear agreement between the ones who work in the business and the ones who don't.
• Private equity. Wants a management team that stays after you go, and monthly reporting it can rely on without checking your working.

None of those can be built in a year. Start around three years out, because a buyer judges a trend, not a year. One good year looks like luck. Three look like a business.

Leave it late and the list shortens on its own. No manager, and the staff option is gone. Contracts held in your personal name, and the trade buyer has a reason to walk. What remains is whoever will take the business as it stands, on their terms.

The honest objection is that some sales are not chosen. Health decides, or a partner, or a market turns. You do not get three years' notice. That is exactly why preparation should be a habit rather than a project. A project needs a start date. A habit is already running when the phone rings.

Decided late, a sale is something that happens to you. Prepared early, it is something you choose.

Yvon Chouinard had three doors and chose his own

In September 2022, Patagonia's founder Yvon Chouinard, then 83, announced that he, his wife and their two adult children had handed over ownership of the company. The voting stock went to the Patagonia Purpose Trust. The other ninety-eight percent went to a non-profit, the Holdfast Collective, which receives the profits the business does not reinvest. "Earth is now our only shareholder," his letter said.

It was not arranged in a weekend. Chief executive Ryan Gellert said the family had asked a small group to design the structure two years earlier. In his letter, Chouinard set out the options they worked through. A sale risked a new owner who would not keep the values or the team. A public listing meant pressure for short-term results. His children had already decided they did not want to own it.

Read that as a grand gesture and you have misread it. The generosity is the headline. The preparation is the lesson. Chouinard could turn down a trade sale, turn down a listing and design a third option because the business already ran under its own chief executive, on values it had kept for decades before anyone asked who would own it next.

He had choices because he had spent years making them possible. Most owners reach the same fork with one door open, and it is rarely the one they would have picked.

Why I do it this way

I use this, and I have for years.

Eighteen years. Five businesses built and sold. The lesson I took from all of them is that a sale is decided long before anyone signs anything.

So I run a business as though someone may need to buy it in three years, whether or not I plan to sell. The accounts are kept so a stranger could read them. Someone other than me can run the week. The contracts sit with the business, not with my name.

None of that is exit work. It is simply how a business ought to run, and it happens to leave every door open.

It does not promise a buyer or a price. Nothing does. What it protects is the difference between choosing and accepting.

Do this before Thursday

On Thursday, take a blank page and write down the four buyers: trade, staff, family, private equity. Next to each, one line on what they would need to see in your business that is not there today.

Cross out any buyer you would never sell to. Then pick the gap on what remains that would take the longest to close, and put the first step for it in next week's diary. The fast gaps can wait. The slow ones are the reason you start now.