The Most Common Exit Planning Mistakes Business Owners Make

By: Aaron Puttroff

Selling a business is usually the biggest event of an owner’s life, yet many leave the outcome to chance. Common exit planning mistakes don’t just create stress — they strip value from the business you spent years building.

Whether it’s delayed planning or relying on an unrealistic valuation, waiting until you’re ready to exit creates unnecessary risk and weakens your leverage. Let’s look at where owners go wrong and the actionable steps you can take to exit on your terms.

Where Owners Get Tripped Up

The most common exit planning mistakes usually come down to timing, numbers, and preparation.

Not Starting Early

It’s generally recommended to start planning your exit as early as possible.

Starting early doesn’t mean you aren’t committed to your work. It means you’re building your business with long-term value in mind.

Starting early can help make exiting more manageable. With a longer time horizon, owners can fix smaller issues and strengthen their operations to be more attractive to buyers.

No Formal Valuation

Relying on a guess instead of a formal valuation can distort your real market price. You also end up with unclear financial goals.

An objective audit of your business can reveal hidden risks, like depending too much on a single customer or key employee. It can also identify any gaps between what your business is worth and what you need to live post-sale. From there, you can take the right steps to grow value and close the gap.

Ignoring the Big Picture

Exit planning is about more than ownership transfer. It’s also about the future of your business. For example, you may want to protect long-standing employees or maintain the company culture after you leave.

Your financial stability matters too. An advisor can review your financial plan, clarify what you need from the sale, and help develop a flexible plan for transferring out.

Failing to Prepare a Successor

Some sales move fast once they start. That’s why it’s smart to identify your successor early, especially if you’re considering an internal transfer. That might be your children, another family member, a co-owner, or reliable employee.

The earlier your successor is identified, the longer you have to develop their leadership skills. And if there’s no potential successor, you might sell to a third party. If so, define what your ideal buyer looks like and articulate your vision before hiring a broker.

Going It Alone

One of the fastest ways to derail a deal? Execute everything yourself.

Trying to negotiate a sale, handle legal details, and manage taxes at the same time leads to burnout and costly mistakes. Worse, if your day-to-day operations slide while you’re distracted, your business value drops right when it matters most.

You need the right team from the start. That includes:

a Certified Exit Planning Advisor (CEPA) or Certified Exit Planner (CExP™)
a financial advisor
an attorney
an insurance professional
a retirement plan specialist who can identify employee incentives
an employee stock ownership plan (ESOP) specialist to evaluate the viability
your CPA to mitigate tax consequences from the transfer or estate and gift taxes
a business broker

Avoiding These Mistakes With a Plan

The real advantage of early planning is flexibility. The sale you envision today may not be the same five years from now. Market conditions may change. So might your family, financial needs, or timeline.

Fortunately, you don’t have to navigate your exit alone. Certified Exit Planner Aaron Puttroff

works with clients to plan for potential challenges and to help them avoid common exit planning mistakes. He knows first-hand how bad financial decisions and one-size-fits-all advice can erode hard-earned equity.

With his professional guidance, you can help protect your business value and exit on your own terms.

Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). OSJ: 5280 CARROLL CANYON ROAD, SUITE 300, SAN DIEGO CA, 92121, 619-6846400. Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. LIVING LEGACY FINANCIAL INSURANCE SERVICES LLC is not an affiliate or subsidiary of PAS or Guardian. Insurance products offered through WestPac Wealth Partners and Insurance Services, LLC, a DBA of WestPac Wealth Partners, LLC. CA Insurance License #0F64319, AR Insurance License #9233390 | This material is intended for general use. By providing this content Park Avenue Securities LLC and your financial representative are not undertaking to provide investment advice or make a recommendation for a specific individual or situation, or to otherwise act in a fiduciary capacity. Guardian, its subsidiaries, agents and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your situation. | 9171745.1 Exp. 10/28