FAQ: What Is a Triggering Event in Exit Planning?

What Is a Triggering Event in Exit Planning?

A triggering event in exit planning is any significant change—planned or unexpected—that initiates or accelerates the process of exiting a business. These events can be personal (e.g., health issues), business-related (e.g., a sudden offer), or market-driven (e.g., industry shifts).

Triggering events don’t always lead to an immediate sale, but they often force owners to confront whether they’re ready to exit—and what that exit might look like.

Why Does This Matter?

Many business exits happen reactively instead of strategically. Triggering events catch owners off guard, leading to rushed decisions, low valuations, or preventable tax consequences.

Understanding and preparing for potential trigger events helps business owners stay in control—even when life throws a curveball.

Common Triggering Events

Triggering events often fall into three categories:

Personal

• Health issues or disability

• Divorce or family changes

• Death of an owner or key partner

• Burnout or loss of passion

• Retirement age approaching

Business

• Disputes among partners

• Loss of a major customer

• Business outgrows current ownership skills

• Buyout offer from a competitor or private equity group

Market & External

• Economic downturns

• Tax law changes

• Industry disruption or consolidation

• Shifts in supply chains or labor

Related Questions Owners Often Ask

• What should I do if I receive an unexpected acquisition offer?

• How can I prepare for an exit if I don’t plan to leave anytime soon?

• What’s the difference between a trigger event and a planned exit?

• Should I have a buy-sell agreement in place just in case?

  
  

Actionable Tips for Handling Trigger Events

Even if you’re not planning to exit today, these steps can help you prepare:

✅ Have an exit plan in place that includes contingency options

✅ Get a business valuation regularly to understand your starting point

✅ Build transferable value so the business can run without you

✅ Create or update a buy-sell agreement with partners

✅ Assemble an advisory team (valuation expert, tax strategist, attorney)

Proactive planning protects you from reactive decisions. The more prepared you are, the more options you’ll have when a triggering event occurs.

Summary

A triggering event is anything that causes you to seriously consider leaving your business—often unexpectedly. Whether it’s personal, financial, or strategic, the best way to handle a trigger is to be ready for it.

Want help preparing your business for the unexpected? Book a Discovery Call to talk to our exit planning specialists.