In my conversation with Jessica Starks, owner of Exit Factor in Michigan, we explored why planning for an exit is essential for every business owner.
Every business owner will eventually leave their business—whether by choice or circumstance. The question is: will you be ready?
Having an exit plan ensures you can sell on your terms, maximize the value of your business, and secure your financial future. Without a plan, owners risk leaving money on the table, facing unnecessary stress, or even shutting down without reaping the rewards of their hard work.
In my conversation with Jessica Starks, owner of Transworld Business Advisors and Exit Factor in Michigan, we explored the importance of planning ahead, the steps to prepare for a successful exit, and how business owners can position themselves for a smooth transition—whether they plan to sell in three, five, or ten years. Here’s what we learned.
Table of Contents
- Maximize Your Payout: How early planning puts you in control of your financial future.
- Exit on Your Terms: Ways to sell and how to structure a deal that benefits you.
- The Experts You Need: Who to have on your exit team and why going it alone is a risky move.
- Avoid Costly Mistakes: The biggest pitfalls that derail a business exit plan.
- Next Steps: Start with an exit assessment.
- About Jessica Starks
Maximize Your Payout
How early planning puts you in control of your financial future.
Instead of rushing to sell when you're ready to leave, planning your business exit well in advance allows you to increase profitability, streamline operations, and position your business as an attractive investment for potential buyers.
The earlier you start, the more control you have—ensuring you walk away with the financial security and legacy you’ve worked so hard to build when the time comes.
Exit on Your Terms
Ways to sell and how to structure a deal that benefits you.
When selling a business, structuring the deal correctly is just as important as finding the right buyer. The terms of the sale impact how much you walk away with, how the transition unfolds, and your financial security post-sale.
The right structure depends on factors like your business's value, buyer financing options, and your willingness to stay involved during the transition. By understanding your options, you can ensure the deal protects your interests, maximizes your payout, and aligns with your long-term goals.
Some options for transferring ownership include:
- Selling to a Family Member – A common desire, but increasingly rare due to changing generational interests.
- Selling to an Employee – Can be challenging since employees often lack the capital to buy the business.
- Selling to a Third Party – The most common route, which includes:
- Strategic Buyers looking to expand.
- Private Equity Firms aiming to invest and grow businesses.
- Individuals from Corporate America seeking ownership and financial independence.
Many owners assume organic growth is the only way to build value, but acquisitions can often be a faster path to maximizing your business’s worth before selling.
The Experts You Need
Who to have on your exit team and why going it alone is a risky move.
Jessica emphasized that selling a business isn’t a solo effort—you need a strong deal team to navigate the process smoothly and protect your interests. The right experts help maximize your business’s value, maintain confidentiality, and avoid costly mistakes. Key members of a deal team include:
- Business Brokers or M&A Advisors – Manage the sale process, market the business confidentially, and find qualified buyers.
- Attorneys – Handle legal documents and contracts and ensure you’re protected in negotiations.
- CPAs – Assist with financial due diligence, tax implications, and making sure your books are in order.
- Personal Wealth Advisors – Ensure the sale aligns with your retirement and financial goals.
- Insurance Agents & Bankers – Help structure financing for the buyer if needed.
Business owners risk leaving money on the table without the right advisors, encountering legal issues, or failing to sell altogether. Having a deal team in place ensures you exit on your terms and get the best possible outcome from your sale.
Avoid Costly Mistakes
The biggest pitfalls that derail a business exit plan.
Selling a business is a complex process; avoiding common mistakes can mean the difference between a successful sale and a disappointing outcome. Jessica highlighted several pitfalls that can cost business owners time, money, and opportunities if they’re not careful.
1. Waiting Too Long to Prepare
Many owners underestimate how long it takes to sell a business. Without proper planning, they may struggle to attract buyers, get a lower valuation, or even fail to sell at all. Ideally, planning should begin three to five years in advance to maximize business value and ensure a smooth transition.
2. Not Talking to a Broker Before Closing the Business
Some business owners assume their company is only worth its real estate, equipment, or inventory, so they sell off assets and shut down. This is a costly mistake—businesses often have significant brand value, goodwill, and customer relationships that could be sold for much more than just tangible assets. Consulting with a broker ensures owners don’t leave money on the table.
3. Trying to Sell the Business Alone
Selling a business “For Sale by Owner” may seem like a way to save money, but it puts confidentiality at risk and can reduce the value of the sale. It can create instability if employees, customers, or competitors find out too soon. A broker ensures confidentiality, markets the business to the right buyers, and negotiates the best deal.
4. Poor Financial Record-Keeping
Buyers want clear, accurate financials. If records are incomplete, inconsistent, or filled with personal expenses mixed in, it raises red flags and lowers business value. A CPA or financial expert can help clean up financial statements before going to market.
5. Over-Reliance on the Owner
Buyers may hesitate to invest in a business that depends too much on the owner’s expertise, relationships, or daily involvement. Creating standard operating procedures (SOPs), training employees, and reducing owner dependency make the business more attractive and easier to transition.
Next Steps: Start with an Exit Assessment
One of the best ways to start planning your business exit is with an Exit Assessment, like the one offered by Jessica Starks and her team at Transworld Business Advisors and Exit Factor. This assessment helps business owners understand their current business value, identify areas for improvement, and create a roadmap for a successful exit.
Note: This is not a paid promotion. I’m simply sharing what I’m learning through my conversation with Jessica because I believe it’s valuable for any business owner thinking about their future.
Jessica’s process begins with:
- A Broker’s Opinion of Value: An estimate of your business's current value based on financials, industry comparisons, and market demand.
- Operational and Financial Review: Evaluation of your financials, processes, and structure from a buyer’s perspective to identify potential deal killers.
- Competitive Benchmarking: Your business compared to industry peers to highlight strengths and areas for improvement that could increase its valuation.
- A Strategic Roadmap: A step-by-step plan to increase profitability, streamline operations, and position your business for the best possible sale within your ideal timeline.
If you’re considering selling in the next few years, the best time to start planning is now. Jessica and her team can guide you through the process, help you build value, and ensure you exit on your terms.
👉 Schedule a confidential Exit Assessment to see where you stand and what steps to take next!
This conversation with Jessica was just the beginning. In our next session, we’ll dive deeper into how to value your business—what factors impact its worth, how buyers assess a company’s financial health, and what you can do now to increase its market value before selling.;
If you’ve ever wondered, "What is my business really worth?"—you won’t want to miss it! Stay tuned as we explore the essential steps for a successful business exit.
About Jessica Starks
Jessica Starks owns Transworld Business Advisors and Exit Factor in Michigan. She specializes in helping business owners prepare for and execute the sale of their businesses. Her expertise includes:
- Exit Planning: Helping business owners create a roadmap for selling their business, ideally over a three-to-five-year timeline, to maximize its value.
- Business Brokerage: Confidentially marketing businesses for sale, creating competition among buyers, and ensuring smooth transitions for owners, employees, and customers.
- Financial & Operational Readiness: Guiding owners to clean up financials, document standard operating procedures (SOPs), and reduce owner dependency to make the business more attractive to buyers.
- Deal Structuring & Buyer Acquisition: Connecting sellers with different types of buyers, including strategic buyers, private equity firms, and individuals from corporate America.
- Advising on Growth Strategies: Consulting on whether selling is the best option or if acquisition might be a better strategy to increase business value.
Jessica's approach emphasizes thinking like a buyer to understand what makes a business valuable and avoiding common mistakes, such as failing to prepare early, selling without professional help, or undervaluing intangible assets like brand reputation and goodwill.
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