Exit Planning Process – 7 Stages Advisors Should Master

Embarking on a structured exit planning process is a pivotal step for business owners and the advisors who guide them.

A well-defined exit plan is more than a one-time event – it’s a comprehensive roadmap that secures the future of the business and the owner’s personal legacy.

Yet, many owners vastly underestimate the importance of early planning. In fact, while 99% of owners agree that having an exit strategy is important, 80% have no written exit plan 

This planning gap often leads to poor outcomes or regret: roughly 76% of owners “profoundly regret” selling their business within a year of exit. For exit planning advisors, these statistics underscore a clear opportunity – and responsibility – to lead clients through a proven, proactive process well before a sale or succession is imminent.

The Exit Planning Institute (EPI) emphasizes that exit planning is a good business strategy. It’s a strategy rooted in execution that focuses on building enterprise value now while aligning the owner’s business, personal, and financial goals for the future.

Advisors who master this process (often following frameworks like EPI’s Value Acceleration Methodology) can help owners not only maximize value but also achieve a transition on their own terms.

Below, we break down the 7 key stages of the exit planning process that every advisor should master, each corresponding to core principles of value acceleration and value maturity.

By implementing these stages, advisors can ensure their clients’ businesses are “built to sell” – ready for a successful exit whenever the timing is right.

7 Stages of a Successful Exit Planning Process

1. Clear Goal Setting

The foundation of any exit plan is clarity on the owner’s goals. Advisors must begin by helping the business owner articulate their objectives:

What is the desired timeline for exit?

What is the after-tax amount the owner needs from a sale to fund retirement or their “next act”?

What legacy do they wish to leave with the business or community?

Exit planning addresses not just the business sale, but the future of the owner’s family and life after exit.

Thus, goals should span personal, financial, and business ambitions.

For example, an owner may want to retire in 5 years with a certain net worth, ensure their employees are taken care of, or transition the company to a family member.

As an advisor, making these goals explicit and measurable is critical – they will drive all subsequent planning decisions. This stage aligns with what EPI calls the “Identify” phase (identifying owner objectives and baseline value). Solid goal setting early on ensures the exit plan is tailored to the owner’s vision and provides a clear target for value creation.

2. Accurate Business Valuation

It’s impossible to plan an exit without knowing what the business is worth. Accurate, professional business valuation is the second key stage. Many owners are surprised to learn that an estimated 80–90% of their net worth is tied up in their business, yet most have never had a formal valuation done or have an outdated notion of value.

Advisors should obtain a comprehensive valuation of the company as it stands today. This establishes a baseline and uncovers the “value gap” between the current value and the owner’s financial goal.

In practice, valuation experts will also help identify add-backs and normalize the financials – often calculating an adjusted EBITDA that reflects the company’s true earnings power after removing one-time or personal expenses.

This metric is crucial for exit planning, as buyers and investors look at adjusted EBITDA to gauge sustainable cash flow. By obtaining a credible valuation and understanding the drivers behind it, advisors and owners can make informed decisions in the exit planning process (for instance, whether the owner needs to grow the business’s value by 20% or $2 million to meet their retirement goal).

Only with a solid grasp of value can realistic exit timelines and strategies be developed.

3. Strategic Value Enhancement

With goals set and a baseline valuation in hand, the next stage is all about increasing the business’s value. Advisors should work with owners on a strategic value enhancement plan – essentially, a roadmap to build enterprise value over time.

There are two primary ways to build value: increase the company’s cash flow (EBITDA) and improve its valuation multiple. Boosting EBITDA often means driving revenue growth, improving profit margins, and cutting waste – all while maintaining or enhancing quality and customer satisfaction.

Improving the valuation multiple involves reducing risk and strengthening the company’s intangible assets (the four “intangible capitals” EPI identifies: Human, Structural, Customer, and Social Capital).

In practice, this could include initiatives like: developing a stronger management team and delegating key duties (to make the business less dependent on the owner), implementing efficient processes and documented systems, securing long-term customer contracts, diversifying the customer base, and nurturing a positive company culture. Each of these steps reduces risk and makes the company more attractive to buyers, thus potentially raising the multiple a buyer would pay.

Advisors should prioritize value drivers through a structured value enhancement plan – often breaking it into short-term wins and longer-term projects. It’s important to set key performance indicators (KPIs) and track progress on value-building initiatives. 

4. Comprehensive Risk Assessment and Mitigation

Protecting the value that has been built is just as important as growing it. Risk assessment and mitigation is the fourth critical stage. Advisors should conduct a thorough risk audit covering all aspects of the owner’s business and personal situation. Common risks fall into three categories: business risks, personal risks, and financial risks.

Business risks might include an over-reliance on a few big customers, dependency on the owner or one key employee, weak financial controls, pending legal issues, or outdated equipment.

Personal risks could be the owner’s health and readiness for life after exit, or a lack of successor. Financial risks include inadequate diversification of wealth (if all net worth is in the business) or tax liabilities. According to EPI, “protecting value is the first step in building value” – in other words, shoring up weaknesses today prevents erosion of enterprise value and sets the stage for further growth.

Critically, advisors must prepare for unplanned events. Studies show that roughly 50% of business exits are involuntary, triggered by the 5 “Ds” – Death, Disability, Divorce, Disagreement, or Distress.

An owner could be forced to exit due to illness, or a sudden offer, or other life changes. Contingency planning is therefore essential.

This may involve: ensuring the business has up-to-date buy-sell agreements and adequate insurance (e.g. key person insurance), documenting standard operating procedures, cross-training management, and securing retention plans or stay bonuses for key employees.

One of the most effective risk mitigation steps is making sure the business can run without the owner’s daily involvement. By decentralizing the owner’s roles and responsibilities, the company becomes more resilient – which not only protects value if something happens to the owner, but also increases value in the eyes of buyers.

Advisors should help owners create a prioritized action plan to address risks, tackling high-impact, high-probability risks first. This might mean, for example, immediately diversifying the supplier base if the business relies on a single supplier, or setting up a management succession plan if the owner is the technical expert.

The end goal of this stage is to preserve and protect the value the owner has built, ensuring that an unexpected event won’t derail the exit outcomes. In value acceleration terms, this aligns with the “Protect” stage of value maturity, forming a safety net under the company’s value before the owner moves toward an exit.

5. Succession Planning and Exit Options

A successful exit requires choosing the right exit strategy and preparing the business for that specific transition. In the fifth stage, advisors and owners focus on succession planning and exploring exit options.

Succession planning often refers to internal transfers – for instance, grooming a family member or key employee to take over leadership. Exit options also include external routes such as selling to a third-party buyer (e.g. a competitor, strategic buyer, or private equity firm) or a management buyout/Employee Stock Ownership Plan (ESOP). Each path has unique implications for timing, valuation, and preparation.

For example, if selling to a third party, the owner might need to invest in professionalizing the business and hiring an investment banker to solicit offers. If planning to transfer internally, the focus might shift to training the successor and structuring the financing of the buyout (perhaps over a number of years).

Various exit strategies for entrepreneurs exist, and part of an advisor’s role is to educate the owner on these options. Interestingly, research shows about 70% of owners prefer an internal transfer (to family or employees) over an outright external sale – though every situation is unique and the best option depends on the owner’s goals and the business’s readiness.

Advisors should help the owner evaluate which exit option aligns best with their objectives and market conditions.

This often involves a candid assessment of the owner’s priorities: e.g., is maximizing sale price the top priority, or is preserving the company legacy and jobs for employees more important? The chosen strategy will dictate many planning steps.

For instance, if maximizing value for a sale is key, the owner might focus on boosting EBITDA and assembling a deal team. If a family succession is planned, the advisor might concentrate on estate planning and family governance issues (like treating heirs equitably).

In all cases, having a formal succession plan in place well ahead of the exit is vital. This plan should outline who will take over (or who will buy), when the transition will occur (target timeline), and how it will be executed (financing, training, role transfer, etc.).

By mapping out the succession or sale process, advisors ensure there are no last-minute surprises. This stage corresponds to the “Harvest” phase in value acceleration – it’s about preparing to harvest the value that’s been built, whether by sale or transfer, in a deliberate and well-orchestrated way.

6. Estate & Financial Planning Integration

One often overlooked aspect of exit planning is integrating the owner’s personal financial and estate planning into the business exit strategy.

A liquidity event from selling a business can be life-changing, and without proper planning, much of the gain can be lost to taxes or poor financial management post-sale. In stage six, the advisor coordinates with financial planners, wealth managers, and estate attorneys to ensure the owner’s post-exit financial security and legacy are secured.

This includes tax planning for the sale or transfer – for example, identifying strategies to minimize capital gains tax or utilizing structures like trusts, family limited partnerships, or charitable vehicles if appropriate.

Early estate planning is crucial: if the owner intends to pass the business to heirs, they might start gifting shares or setting up trusts years in advance to reduce estate tax burdens. Even in a third-party sale scenario, owners should prepare for the eventual estate implications. Without proper planning, the owner’s estate could face a massive tax bill – often the single largest tax hit comes in the year after an owner’s death, when estate taxes on the business value are due within nine months in cash.

Advisors need to help owners plan for liquidity to cover estate taxes or find ways to reduce the taxable estate value (through insurance or legal structures) so that the owner’s family isn’t forced to sell assets unexpectedly.

Additionally, the financial plan should address how the owner will invest or allocate the proceeds from a sale. Will the sale proceeds, after taxes and fees, be enough to fund the owner’s desired retirement lifestyle? It’s critical to calculate the net proceeds (what the owner actually keeps after paying taxes, transaction fees, settling debts, etc.) – which is often substantially less than the headline sale price.

Advisors should run scenarios to ensure the owner’s financial goals (like a certain annual income or fund for a new venture/philanthropy) are realistic given the anticipated net from the exit. This stage often involves working closely with the owner’s personal financial advisor to integrate the exit plan with the owner’s long-term retirement plan.

Business Estate Planning documents (wills, trusts, powers of attorney) might be updated to reflect the impending change in assets. Overall, by weaving estate and financial planning into the exit strategy, advisors help the owner preserve the wealth they’ve created and achieve peace of mind that their family’s future is secure. This holistic approach reflects the “Manage” stage of value maturity – looking beyond the transaction to managing the wealth and legacy that result from the business exit.

7. Effective Implementation and Continuous Review

Even the best exit plan means little if not executed properly. The seventh stage is about putting the plan into action and continually monitoring progress.

Exit planning is not a set-and-forget endeavor – it’s an ongoing process that may span several years and must adapt to new developments. Advisors should work with the owner to implement the action items from the prior stages: initiate value enhancement projects, address the risk mitigation to-dos, begin grooming successors or engaging with potential buyers, etc.

Project management skills are key here, as multiple parallel workstreams (operations improvements, financial audits, legal structuring, etc.) often need coordination. Establishing a timeline with milestones can help keep everyone accountable.

Crucially, the advisor and owner should schedule regular plan reviews, perhaps quarterly or at least annually. In these reviews, they assess what has been accomplished, update the valuation (has enterprise value increased?), and revise the plan for any changes in the owner’s situation or market conditions.

If the economy shifts or the owner’s goals change (for example, deciding to postpone retirement), the exit plan should be adjusted accordingly. Continuous review ensures the plan remains aligned with reality. As EPI’s Chris Snider notes, “Manage Value is the last stage... not because it comes at the end after you harvest, but because it represents full maturity” – in fact, managing and monitoring value happens throughout the business lifecycle.

This echoes the idea that exit planning and business planning are intertwined; by keeping a close eye on value drivers and readiness factors at all times, the business stays “exit-ready.”

Another aspect of implementation is maintaining owner engagement and commitment. It’s common for owners to lose focus on exit planning when day-to-day fires crop up.

Advisors can combat this by continually demonstrating progress (for example, showing how last quarter’s improvements raised the valuation by 5%) and by keeping the owner’s end-goals front and center.

Using structured processes and tools can help; many advisors employ checklists or software platforms to track tasks and send reminders.

Regular check-ins are also an opportunity to involve the owner’s broader advisory team (accountant, attorney, wealth advisor) to ensure all aspects are on track.

In short, stage seven is about execution, measurement, and adaptation. A plan implemented and monitored with discipline will yield the desired results – a business that can be exited smoothly, at maximum value, and at a timing of the owner’s choosing.

At that point, the owner can confidently step away, knowing that both the business and their personal finances are prepared for life after exit.

Maus: Your Partner in the Exit Planning Process

Mastering these seven stages is far easier with the right tools and support. As advisors look to implement the Value Acceleration methodology in their practice, leveraging purpose-built exit planning software can dramatically improve efficiency and consistency.

Maus offers an integrated platform and exit planning software solution that aligns with the very principles outlined above. In fact, Maus Software has partnered with the Exit Planning Institute and designed its tools to integrate seamlessly with the EPI Value Acceleration Methodology (VAM). This means advisors (including Certified Exit Planning Advisors, or CEPAs) can use Maus to execute each stage of the process in a repeatable, scalable way.

(At Maus, we’re proud to support a global network of advisors and CEPAs in delivering successful exits. Learn more on our website about how our exit planning software can elevate your practice.)

Exit Planning FAQs for Advisors

Q: What is the Exit Planning Institute’s Value Acceleration Methodology (VAM)?
A: The Value Acceleration Methodology is a framework developed by the Exit Planning Institute (EPI) for executing exit planning in a holistic, strategic way. In EPI’s words, VAM is “the value management system that makes the timing of an exit irrelevant”. It focuses on building business value now (through incremental improvements and de-risking) and aligning the owner’s business goals with their personal and financial objectives. 

Q: When should business owners start exit planning?
A: As early as possible – ideally years before the anticipated exit. One of the biggest mistakes owners make is waiting too long to start planning. Many think “exit planning is something you do 18–24 months before selling”, but in reality, a great exit is the result of decisions and improvements made throughout the life of the business. 

Q: How can advisors attract and engage business owners in the exit planning process?
A: Attracting clients and keeping them engaged through what can be a multi-year process is a common challenge for exit planning advisors. To attract business owner clients, advisors should position themselves as educators and trusted resources. This might involve hosting seminars/webinars on exit planning, offering free initial assessments or benchmarking reports, and sharing valuable content that highlights the costs of not planning (for example, citing that most owners regret rushed exits). Utilizing digital marketing and content strategies is key – many advisors leverage client acquisition tools and services (such as Maus’s Attract platform) to reach business owners who are beginning to think about succession or who fit certain criteria (age, industry, etc.). By providing business owners with a small taste of the value planning process – say a complimentary valuation or readiness score – advisors can pique interest and start the conversation.

Once a business owner becomes a client, ongoing engagement is crucial. Owners are busy, and exit planning can easily fall to the back burner without regular touchpoints. Advisors should establish a cadence of check-ins (e.g. quarterly meetings or reports) to review progress on action items and update the owner on value growth. Making the process visible and results-oriented (for instance, showing how last quarter’s improvements increased the business’s valuation) helps maintain the owner’s motivation. Utilizing technology can significantly aid engagement: a dedicated client engagement platform or portal can automate some of this process. For example, Maus’s Engage tool can send periodic questionnaires or performance dashboards to the owner, along with reminders of upcoming tasks or milestones. Automated valuation updates (using integration with financial data) can show the owner in real-time how their efforts are adding value, which reinforces the importance of sticking with the plan. Advisors can also keep owners engaged by tying the planning activities back to the owner’s personal goals – for instance, reminding them that “de-risking this aspect of the business will help ensure you can retire by 55,” linking technical tasks to personal outcomes. Celebrating interim wins (like paying off a loan, securing a key contract, or hitting a revenue target) is another way to maintain enthusiasm over the long haul. In short, advisors should combine education, consistent communication, and the use of engaging tools to guide clients through the lengthy exit planning journey. By doing so, clients remain involved and committed, greatly increasing the likelihood of a successful exit when the time comes.

Q: What is Adjusted EBITDA and why is it important in exit planning?
A: Adjusted EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), adjusted for one-time, non-recurring, or owner-specific expenses.