Crafting Your Exit Timeline: A Guide for Small Business Owners

Most small business owners don’t think about leaving their business—until they’re forced to. Whether due to health issues, burnout, or a surprise opportunity, lack of planning often leads to regret, lost value, and rushed decisions.

Why You Need an Exit Timeline

A clear exit timeline helps you:

• Set specific exit goals

• Stay aligned with personal and financial priorities

• Maximize business value before stepping away

• Avoid emotional or chaotic transitions

  
  

A timeline isn’t just about picking a retirement date. It’s about designing your exit around when you want to leave and how you want to feel when you do.

Step-by-Step: How to Set Your Exit Timeline

1. Define Your Exit Goals

Ask yourself:

• Do I want to retire, semi-retire, or start something new?

• What annual income do I need post-exit?

• How involved (if at all) do I want to be after the sale or transfer?

  
  

Write these goals down. They are your North Star.

2. Choose a Target Exit Date

• Pick a tentative month and year you’d like to be fully transitioned out.

• Make sure it’s realistic—most exits take 1–3 years to plan and execute well.

• Build in buffer time for unexpected events or deal delays.

  
  

3. Assess Current Readiness

Evaluate where you and your business stand today:

• Is the business reliant on you?

• Are your financials clean and up-to-date?

• Do you have a successor or buyer in mind?

  
  

If the answer is “no” to any of these, give yourself more lead time.

Preparing for a Successful Transition

4. Work Backward from Your Exit Date

Break the next few years into phases:

• Year 1: Strategic planning, financial preparation, initial valuation

• Year 2: Operational improvements, buyer preparation

• Year 3: Final valuation, deal structuring, legal steps

  
  

You can adjust based on your business size and the complexity of your exit.

5. Put It on Paper

Commit to your timeline by documenting it in a spreadsheet or written plan. Share it with your CPA, attorney, or exit advisor. Accountability matters.

Pro Tips for a Smooth Transition

• Start earlier than you think. Even “simple” exits often take 12–24 months.

• Involve key advisors—including your tax advisor, attorney, and financial planner—early in the process.

• Plan for the life you want after you leave. The business is only one part of the picture.

• Review your exit goals annually and adjust as needed.

  
  

Common Pitfalls to Avoid

1. Waiting until burnout to begin planning

2. Assuming your business is ready to sell when it isn’t

3. Not aligning personal finances with business exit

4. Letting emotions drive exit decisions

5. Overestimating business value without a formal valuation

   
   

Final Checklist: Are You Ready?

✅ Defined personal exit goals

✅ Chosen a realistic target date

✅ Assessed current business readiness

✅ Created a 1–3 year phased plan

✅ Shared the timeline with key advisors

✅ Scheduled annual reviews of your exit plan

Setting your exit timeline is the first step in taking control of your future—not just for your business, but for your life. Done right, it creates clarity, motivation, and momentum.

Need help getting started? Visit our Exit Planning page to learn more about effectively planning your business exit.