Episode 135: The Exit Strategy Every Bold Business Owner Needs

We didn’t put in years of sweat equity just to be stuck inside the thing we built.

In this episode, we’re talking about something too many business owners avoid until it’s too late: a real exit strategy. Whether we want to sell, scale back, or shift into a new season, our business should give us options—not trap us in a job we can’t quit.

Inside this episode, we break down:

• What an actual exit strategy is (and why it matters, even if we’re not planning to leave anytime soon)
• The foundational systems that make a business valuable without us in it
• The mindset shift we need to stop building a business that needs us and start building one that works for us
• Steps we can take right now to protect our future and unlock more freedom

We didn’t start this journey to play small or stay stuck. We built this to have choices—and now it’s time to make sure we’re setting ourselves up to have them.

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Read the full transcript of this episode below:

 

Hey, I’m Lynn.

And I’m Amanda. Welcome back to the Pursuit of Badasserie, the podcast. Today we’re talking about something that might be a sore subject for a lot of people.

We’re talking about selling your business, not running it. I mean, not just even sore, but like, I think some people might be excited about it, but some people might not even like, have that in their mind.

And it’s interesting, because we’ve had many conversations with entrepreneurs, including ourselves over the years about like, why are you building this business, you’re not going to be around forever?

Is it a legacy business? Are you passing it down? Are you building it to sell? Are you just going to close up shop just for the here and now?

And I think, you know, this particular topic, hopefully will put some little, some little nudges within you and to start to look at your business differently and some of the pain points and how to prepare yourself for setting your, your business up to sell.

Absolutely. I believe, and this is something I believe now that I have sold a business because I absolutely didn’t believe this before I had sold a business is I think that every business, when you open, when you start your business, you need to be thinking of an exit strategy.

What is the exit strategy? Because let’s get started. It’s unrealistic to assume that you’re going to run a business until you’re 437 years old, that you’re going to become a vampire, and you’re going to run this business forever.

I don’t want to live that long. I don’t want to live that long. I don’t want to run any business that long.

Even the ones that I love, I would never want to be doing it for that long. But what is your exit strategy?

Are you planning, like Lynn said, are you planning on making this a legacy? It’s going to be Samson and Sons.

Are you planning on passing this on? But even if you’re planning on passing this on, you really should have an exit strategy in case the people you’re passing it on to don’t want it.

I think a lot of people, there’s this disillusionment, like, oh, I’m going to pass my business on, and then all your kids are like, I don’t want it.

I don’t want to run a funeral business. I don’t want to run your mom and pop shop. I don’t want that.

So being able to then find an exit strategy that works for your business on the off chance your family doesn’t want to take it over is another way to pass the business on because you’re passing on the profits and being able to sell that business once you’ve passed on.

zone Thank Is also important. mean, I, nobody likes to think about it. mean, it’s like making your funeral arrangements and like you’re planning what burial plot you’re going to have.

It’s not a thing to talk about. It’s not really fun. And I think of, this always makes me think of, I, in college, I was getting a scuba diving certification and we went for our open water test and my instructor died in the water with us.

So, holy crap. Yeah, I know. We’re going to start with that. Sorry. Anyway, sorry, died in the water with us.

And, uh, there was, I did not because I couldn’t, there was this whole thing that blew up because so many people had started and couldn’t finish their certification.

So you had this like business side of things, like all these people who had paid money to be certified and hadn’t finished their cert.

I’m not saying I was not one of those people. I was so sad for him. It was, he was such a nice guy, but then his wife wanted to sell the business, but there were all these contracts, partner that he had didn’t want to sell the business.

They had no. And whatsoever, because for them, it was just a love, passion business that they were going to keep forever in the family.

And there was absolutely no strategy, no contracts, no partnership agreements, nothing. And it could still be going on like 30 years later.

I don’t know how long it’s been since I’ve been in college, but it’s been a while. It could still be going on for all I know, because I know that by the time, several years later, it was a good five years later that the partner reached out to me and was like, do you want to try to get your cert?

They were still in the process five years later. That’s insane. And it all came down to who gets the business, what’s going happen with it, are all these contracts that are, all these handshake deals, all these internal agreements that nobody really had paperwork on.

And so when I think of an exit strategy, I think of that. every time I have personal family involvement with funeral arrangements and so forth, I think about what it’s going to look like for the next set of people.

Like, this is a very morbid idea, but sometimes you just want to sell your business. Yeah. But I think it’s a great example.

we definitely, we both sold businesses across. And I definitely would say that is, that’s a great story, a great story to actually say, oh, I will never forget.

Somebody once telling me like you cannot sell something that you’ve built that can’t be done without you. Right. So a lot of times we build businesses and I probably chopped that up a little bit, but essentially we build businesses and we have to be.

The center of the universe in a lot of ways, even when we kind of transition out of the every day, it’s still hard because we have to have a fiber of that.

We’re not putting in the work to, to build the branding, to build the SOPs and not the branding, but the branding helps, but really the one, two, threes of behind the scenes of how everything is.

We’re not legitimizing, you know, you’re talking about the handshake deals. We met in Hawaii, Hawaii has a lot of handshake deals, you know?

And I will say. It’s not the only place that has these, but it is quite common, especially in new businesses.

Like they’re not thinking of how am I going to build this to be able to, because what I will say, if I can back up is like the things that you’re doing to build the cell are also the things that will help you scale and sustain.

It’s all like these, and listen, we get it. We are doers. We naturally can dive in and figure things out and don’t always document what we used to do that.

Now we have a team, make sure that they’re documenting everything for us. So we don’t have to, but you have to build a business.

I literally just had a conversation with somebody last night who is extremely successful. The Midas touch. He is a pied piper.

He works as a consultant for huge networking organization where he is doubling like thousands of members, doubling that in like 30 days, 60 days.

He’s excellent when he does, but he has no PowerPoints. He has no, like, he just shows up in the magic house.

And that, and he said, like, that is not, it’s not sustainable, let alone scalable, because it can only be in one place.

But also, his knowledge, his secret sauce is unsellable. You know, people don’t buy McDonald’s for the hamburger. They buy it for the systems.

They buy it for the proven strategies. They buy it for, yes, the brand name does help, but there are lots of other brand names out there.

That you could buy or not brand names. And so it’s really important as you’re, you we’re kind of broken all over, but to, like, build a business that doesn’t need to revolve around you.

And so that is creating your SOPs. That is having your legal kind of side. And it can be as simple, as simple as can be, right?

But it is important to make sure that you have that. Make sure that your contracts are up to par.

When I sold my security company, I mean, each industry is slightly different. mean, industry is different. And like how you, you sell the, the company, like how much you should expect.

We’re working with a client right now who’s selling her company. Um, and it’s a e-commerce. So hers is slightly different than what, what the, your fitness studio was versus the alarm company, but they have like the multiplication essentially, uh, like the evaluation.

Um, but I had to make sure like all my contracts were on par. Uh, what was in those contracts made a difference in how much money I would get, like how much multiplication I would get, um, how long the client base was, like what I had in the pipeline, but all that had to be extremely documented or not.

If it wasn’t documented, then I get a lot less. Um, and because I obviously had contracts and stuff, but if, because we put in the work to make sure that the things that we had, even though our contracts were a little bit looser than like our competitors, where we didn’t lock them in, they could give us 30 days written notice or 60 days written notice versus other people.

they got a That made our value go down, but because of other things that we had, made our value up, and so just making sure you have all of that back-end stuff really put in so it doesn’t have to revolve around you.

And seeing those contracts as the assets that they are, because there’s infinite examples that we can give, but even if you look at a rental property, that you’re selling a piece of property, if you have a long-term renter already in there, that’s a much more sellable property to somebody who’s trying to get into the rental industry, because they already have guaranteed income from the very start, so it’s almost like their mortgage is already paid off before they even get into it.

It’s the same thing with your contracts. And even when it comes down to the contracts of your employees, if you have a set group of staff, and you’re negotiating to sell your business, to say, well, yes, you’re buying the business, but you’re also buying the expertise of all these staff members who’ve already agreed to sign on, regardless of who’s owning the business, for the next five years.

So you’ve got five years of guaranteed employer. So if of these key people, that alone could even double the amount that your business is worth.

So really, when you’re thinking about selling your business, it’s not just, I’m done with this, I’m ready to go, I’m ready to sell, or in some cases, like, I need to sell, financial reasons, whatever your reason is behind it.

If you take up the time to really think about all the assets and all the things that your business could mean for somebody else, there’s a lot more to it than just how much you’ve grossed over the last two years.

There’s so much more to it, and it’s really important, regardless of whether you’re selling it yourself or with a broker or whoever, to look at your business as a whole, not just what it brought in in gross, but what it brought in in branding, what it has for market reach, what, all the things, because it’s not just one thing that’s going to price out your business.

Yes, I love that you said that. I think the only other thing that I would add to all of that is also the relationships that you’ve built in the industry.

10. Leverage you. And for example, when I was selling the alarm company, I actually had a great relationship with our vendors.

I had a great relationship already with our, our call center. Right. And so, and a few other things like some major players in contracting on the island, obviously, because it’s an alarm company, like that helps.

And I use that and left from them almost letters of reference as leverage to as well. So all of that combined, like you start today, even, even if you have no idea if you’re going to sell, no idea if it’s going to be a legacy, like all of that’s important.

It helps you be a better business person. It helps you actually be able to scale. And it gives you the ability because if you start working on it now, even if you have no idea what you’re going to do, and you’re not ready to create the exit strategy, you’re still laying the foundations and the fundamentals that would enable you to be able to sell if you wanted to, or pass it.

Even on, like, even if you’re, even as an. It’s strategy, passing it on as a legacy business, like, then that can happen as well easier.

And I will say, like, especially being in Southeast Asia, I’ve been diving more into like the family businesses and they are on a decline, like a lot, especially this generation coming up, like they don’t want to take over their family business.

And I know a lot of businesses now, too, and usually family businesses kind of go south around the third or fourth generation.

Anyway, and it’s because they’re trying to change too many things or whatever, but we’re definitely in a season where family businesses are kind of like taking a decline.

So my opinion, you want that contingency plan, regardless if you think it’s going to be a legacy business or not.

And again, everything that we’re telling you will absolutely help you sustain and scale a business regardless. So it’s just being prepared for that.

Let’s talk about some sabotages that people do. This is my favorite. And believe me, we definitely have these two, but some sabotage.

Just that people do when they’re thinking about selling their business or in the process of talking themselves down on the price because they’re in a bad place.

think that one of the ones that regardless of the reason, some people, there’s many reasons that people will sell a business, but a lot of times it is because something bad has happened, whether the business isn’t doing well, their personal life isn’t doing well.

If the exit strategy is coming from a negative place, they suddenly start to devalue their business just because they’re not in a good place.

I didn’t make enough money from this business, the business isn’t worth more. No, just because you’re done with it emotionally, just because you didn’t make as much as you thought you could, it doesn’t mean that the right person couldn’t come in and quadruple the profits in a year.

Which you did, which I did, I’ve done before, so I’m in a business that I bought, so you’ve got to look at your business from a purely logical fact standpoint and not from the emotional capacity that you’ve placed on it.

Your business is not the emotions you have in it. If that were Oh yeah. If that were the case, then every business would be sold for $500 million because emotionally you are attached to that business.

Even if you are on the way out, most people who had this passion business are a little bit emotionally attached.

Even if it was your father’s business and you don’t want it, you’re still emotionally attached to your father’s legacy.

So there’s a lot of that emotional attachment that people will take on when they’re selling a business and that is absolutely sabotaging your ability to see the true value of your business and to let go of it to the right person or even to the wrong person if the money is right.

So you’ve got to kind of separate out, what are your reasons to sell? Why are you selling? But I think devaluing your own business because of your emotional attachment is one of the number one sabotage, most saboteurs.

I would, I would actually, I love that. And I would say the other side as well, is that a lot of people think it’s their baby, they’ve invested all this time, yes.

So you have one or the other, really, where they’re over-evaluating because they put on. And really, that’s not the market value.

We’re not saying that you can’t negotiate and get more and be ballsy about it, but at the same time, don’t overinflate.

And that’s why it’s really important to actually hire somebody from the outside to get, sometimes your accountant and your bookkeeper, my CPA did it, he was an EA, to help evaluate it in this market, in this industry, because also marketplace, especially now with all the tariffs happening, and so there’s a lot of changes for different businesses.

So the market could definitely play a part, but I would definitely say the other side. Another sabotage. your equity.

You’re overestimating your sweat equity. Sorry. The other sabotage that we’ve, and this kind of goes on to the last thing I just said that I know we’ve both seen, some of us have experienced it through our own processes, holding on too long, right?

Like not, not, not, not like letting go. So even when you’re in the process, we’ve seen this a lot, like, and where some of the conversations are sabotaged, because really, they’re not ready to let go, like they’re, they have that hang on it.

And so definitely, like, you need to be ready to let go. that’s kind of the separation of you from your business, like that, that’s a big thing.

And I know I’ll talk about this, or we’ll talk about this in just a second, but that like, your identity has to change because your identity is so aligned and like one with your business typically.

So there’s like a death of that and a rebirth that we’ll get to that. But I definitely say holding on too long and not acting when it’s hot, or trying to almost like dragging your feet, even on a subconscious level.

Yeah, think it really comes down to not trusting your gut and over trusting your ego. I think a lot of times when you’re when you because you have so much identity pulled into your business, if you’re selling it, suddenly, there could be that thought that, Oh, the business.

This is failing, even if it’s not because that failure is ingrained in you. So you’re letting your ego get in the way or you’re trying to find the exact right person.

You’re trying to people please like, oh, I don’t want to leave my clients to somebody I don’t like. It’s not really your job to say whether or not they’re going to like somebody else that takes over.

And it’s not your job to assume they’re not going to like somebody just because they’re not you. That’s your ego taking over.

Sorry, it is. And just to draw to drag it on because you’re not following your gut. I mean, if I, if I honest, the business I sold, I should have sold it five years before I sold it.

I held on to it, even though it was doing well. I mean, it was, it was doing so well.

I held on to it. And even when I decided to sell it, I held off from talking about it and really getting it sold because I didn’t want the ego got in the way.

And it just dragged on forever. And I lost money because of it. Hands down, I lost money. And the reason I lost money was absolutely.

related to COVID, just in the timing. I put my business on the market two weeks before the business was closed down due to COVID.

So that was just really, really crappy timing. However, even still, had I sold it six months, a year before, five years before, like I had planned, I would have had a significantly more money is from it because it’s just of the way I was positioning myself.

So you go. Well, and if I can, since you brought it up, she actually had been starting to talk about and having interviews because I remember being apart six months prior to selling that business.

But that goes to another point that I want to make. And that’s why I want to bring it up is when you’re so secretive or so like, not true, you have to be transparent.

I mean, there’s times for everything in the sale, sell, sale of a business, the selling of a business. But I think that also like added to your dragging of the feet, which is very good.

common. The other side would be people give too much information, which can devalue you and then they have too much leverage to like leverage over you.

But I definitely agree with that. think another one also is, you know, one of the things that I feel like when I was ready, I was ready and I knew, I actually hired somebody to take over.

And so I was grooming them, they became the manager, I was putting all of my eggs in their basket.

And then last minute, they backed out. Yeah. Now I was able, cause I was well liked in the industry.

was able to find somebody, I ended up getting screwed up a lot of money. That’s one other thing we’re going to talk about, but essentially like making sure like you are, you’re being respectful, but you are not putting all of your eggs in one basket until you have an agreement, until you have those, those, you know, NDAs or whatever, and some kind of letter of intent.

Because that can really put you in a pinch. And in, for me, it did work out, but I think that, um,

You know, it hurt, especially because I was friends with this individual and nothing against them, like I understand, but it hurt and it was frustrating and I was leaving the state, which actually put me in a bad position to be able to negotiate for more, even though I was still able to run things.

So it’s kind of something else. And I will say along those lines of being too nice in a sale.

And I say this because that’s me. Well, that was you for sure. But I have a client who was selling a business, assumed everybody who was wanting to look at the business had the best intentions.

Anybody who came to me and said, I am interested in your business, really was interested or qualified to look at the business.

And so she would just, she had this like online NDA, she just had people sign and then she would hand over her tax return and like, she didn’t even black out any, oh, it was when I came in, was the worst, didn’t even black out anything.

It didn’t redact a single thing, like not a social security number, a business ID, like nothing. She was so trusting and it came to find out that it.

It was actually a couple of her competitors looking to look at her back end. They wanted to see her systems.

wanted to see her books. They wanted to steal her clients. They wanted to look at everything. And it was like, by the time I came in, I mean, not to say like she was lucky I came in, but she was lucky I came in because she would have lost it all.

She would have lost absolutely everything that she had to sell. And so having those systems, and I’m not saying you have to distrust every single person who looks at your business, but don’t be overly accommodating with all of your.

So yeah, with all your priority information, don’t give it out to everybody and don’t assume that people are qualified and that they really have the correct intentions.

Like that’s just not how it is. Particularly the more valuable your business is, the more people want to peek under the hood.

Like people want to look, they want to peek into the Christmas presents before they open them. Like that’s a thing.

So I agree. Okay. It’s too nice. It was so. I can’t even imagine. Okay, so another thing is, and we.

There’s a time to, kind of like a house when you’re selling a house, there’s a time to invest to make it prettier to stand out.

And then there’s a time to restrain and not put money into it. And so I think that it’s really, you know, we’re actually working with a client right now.

And she’ll ask us one question. We’re like, you’re selling the business. Don’t invest time and money, not just time, but like pivoting this or pivoting that.

Like, don’t, don’t do that. But yes, this is worth it. Hire this person to help you with it. So really have discernment when, when you should invest and when you shouldn’t, and also like starting something new, right?

As you’re selling it. Um, most of the time, it’s not a good idea. We’re not seeing all the time, but most of the time, it’s not a good idea.

Unless like there’s a foolproof plan, like it’s guaranteed, which nothing in life is guaranteed, but like you have that certainty because it almost, especially with that direction, like if it’s a new direction, essentially, if I go back to the house analogy, it’s like.

It’s painting your kids’ bedrooms with this special paint that your kids love, but maybe the next family isn’t going to want that.

It’s the same kind of idea. Yeah, I mean, it’s okay to paint all the walls white, but don’t put in a new pool.

We want to think about strategically, yes, maybe you could get a little bit more money on the market because that house has a pool, but maybe the people don’t want a pool.

So think of it from that perspective of when you’re thinking about building a new system or adding on to business, buying new equipment, whatever it is that you’re trying to do that you think is going to help sell your business, it might not be what the next person wants.

So I think it is much more, I want to say superficial, because there are some things that you do need to clean up and it’s not always going to be as easy as a new pink color, but it shouldn’t be integral, not pulling up the foundation and moving the house two doors down.

Unless it’s absolutely necessary in order to sell the business. And you have to think about it critically, not emotionally, what really needs to be fixed.

That could be something that an outside person can also consult on a person because it might be hard to see it been in a business for 50 years.

hard to see a hundred percent. I agree. And I think that brings us probably to our last point. feel like we can always go on and out, but higher professionals have legit people looking over your contracts, have legit NDAs.

Listen, we love AI, but AI is not a legit layer. It does not have the legal mumbo jumbo. And I got screwed out of contract and I had real people like looking over it.

And there’s a couple of, there were a couple of things that actually contributed to it, including me being a little too nice sometimes and being a little laxed in some of it and allowing too much time to pass for certain things.

And I see where I went awry. However, like having that and it’s not just legal, it is. Having a consultant or having a broker, you know, people hire us all the time to just kind of help walk them through it and become detached emotionally from it, to see it from more of an operational and an asset versus an emotional like attachment, like your baby.

So it’s really important to hire professionals that it is where you definitely need to be investing and get your book straight.

Like that’s another crucial one about the investment, making sure your books are straight. They should always be straight, but be extra straight for three years, that three years before your sale, whatever that looks like, that’s going to be the most crucial.

That’s what everyone’s going to ask to see. So if you’re going to invest a little extra time in a bookkeeper or something, that’s what I would have them do is have them look at your books, make sure it’s accurate, make sure all that like under the table money has a route, anything that you may have paid yourself just in benefits as an owner.

Like all those things need to be much more clear so that people can see where they might be able to save money.

Add on to the value of their business, so like maybe on paper you made $100, but you also took a $50,000 trip to the Bahamas for a work trip, like that factors in to what you were paid.

So all those little things that, I’m not saying that small business owners don’t cook the books or are cooking the books, I’m just saying that we all make adjustments in what we feel is a business expense or not, and so you want to make sure it’s very clear how much your business is actually worth.

No, I agree. And that’s something, even if you’re selling, you want to sell in six months, you can have a CPA or an accountant clean up your books for the past three years.

So essentially they backlog. They don’t always, like obviously most will want to see some kind of tech stuff, but if they’re seeing real data, I think everybody knows that there’s a variation, like a scale, 50 shades of gray of how people like operate their books.

when about have They’re from accountant to accountant. I give my taxes to one accountant to another, they’re going to have different deductions on their, was this an advertising expense or was this an, it, it varies.

So they’re, it’s written within tax law, at least within the United States, it’s written within tax law that there is a bit of a wiggle room there because people can classify things in different places.

Yeah. So it’s not illegal. Yeah. Usually, usually. All right. So just to wrap this up, like it is really important for, set yourself up for success regardless of this.

And we know that a lot of businesses nowadays are very like in the moment, instant gratification and not really, you’re not looking at it from a scalable or sellable way or hope or even a sustainable way.

Like you’re in the fields, you’re getting all of this attention and you’re loving it, but you’re not planning for the future.

And guess what? That can be taken away from you in an instant. Look at all of the people who’ve gotten canceled and then lose everything like within a month.

Right. So that can happen to you. Don’t think you’re invincible. So these things that we talked about today are definitely things that can help you scale, that can help you sustain, but definitely help you sell in the future if you want to, but then you have more of a foundation and fundamentals to be able to sell because they buy the systems, they buy the operations, not the emotion, not the brand.

Typically, the brand is a bonus. They’re not buying your late nights. They’re not buying all the tears of the crying in the shower.

That’s what they’re buying. They’re buying a real business that has real numbers. try to take your emotions out of it as much as possible.

And if you need help, if you are selling your business or considering selling your business, give us a call, call, text, whatever you want to do.

We are happy to answer some questions about that and help you through that because it is emotionally draining. Even if you’re not terribly emotional or you think that you’re not terribly emotional about your business, it is emotionally draining.

It is a lot to contend with and you do need help. It’s okay to ask for help from a professional.

Yeah, absolutely. Please share this with your audience, with your network, especially those in small business or even in big business, because I’ve worked with some big businesses who don’t have an exit plan or exit strategy either.

Listen, like if you’re not planning, then you are absolutely, it could be taken away from you in an instant.

So we want you to have sustainability, scalability, and sellability with your business. So, and your friends. So pass it along.

Subscribe. Absolutely. Until next time, folks, get after it.