For many entrepreneurs, selling a business is the long-anticipated finish line. For others, it comes suddenly through circumstances beyond their control. However it unfolds, a business exit is one of the most significant financial and personal transitions an owner will ever face. Yet most step into it unprepared.
In fact, only 20 to 30% of businesses that go to market actually sell, according to the Exit Planning Institute. Why? Because too often owners focus on top-line price, overlooking deal terms, valuation, taxes and personal priorities that ultimately determine whether a sale truly succeeds. These oversights are not just financial —they are emotional, strategic and personal.
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Understanding these blind spots can help owners plan an exit that balances economics, risk and control based on their true priorities. Here are six of the most common exit planning gaps — and how to avoid them.
1. Chasing the big number
Many entrepreneurs fixate on the headline price, but the highest offer is not always the best deal. The fine print, from contingencies and payout terms to risk allocations and even who is taking over, can outweigh the top-line offer.
A larger number may come with an earn-out period that stretches for years or conditions that limit an owner’s next move. In some cases, sellers walk away happier with a smaller sale price that provides greater certainty, more control and a buyer whose values align with their own.
2. Misjudging business value
Years of dedication can lead owners to see value in their companies that reflects emotion, effort and legacy — but not necessarily what the market is willing to pay. Buyers, however, weigh risk factors such as customer concentration, dependency on the founder and gaps in financial reporting — as well as profitability, revenue quality, leadership depth and industry outlook.
Owners who skip valuations every year may be blindsided when the final number comes in lower than expected. Treating a business like a house that might sell one day (always in market-ready condition) makes it easier to seize opportunities when they arise.
Benchmarking against similar transactions and tracking industry trends keeps expectations realistic and opportunities visible. Regular, independent valuations keep expectations grounded and highlight what truly drives value.
3. Overestimating the payout
A headline sale price of $100 million may sound transformative — but it does not equal the amount the owner takes home. After taxes, fees, debt payoff and deal terms, the net payout can fall short of the lifestyle, family obligations or philanthropic plans envisioned.
Taxes, in particular, can come as a shock. There is no magic pill to avoid them; only smart strategies to manage them. Working closely with advisors to run real scenarios before the deal closes helps determine whether it is better to sell now or wait.
Understanding true net proceeds is the single clearest measure of whether a deal supports the next chapter.
4. Overlooking personal planning
Without early planning, the proceeds may look impressive on paper but fall short of sustaining the life an owner envisioned, from supporting children and aging parents to maintaining a certain standard of living. These priorities should guide both timing and strategy.
One way to close this gap is to assemble a personal “board of directors”— a wealth advisor, accountant, attorney and other trusted professionals who each see the deal through a unique lens.
With more perspectives at the table, it is less likely something important will get missed. When advisors are collaborative, communicative and open-minded, their combined perspective can help keep the bigger picture in focus and ensure decisions align with long-term goals.
5. Failing to plan the next chapter
Being consumed by the day-to-day demands of running a business can make it difficult to step back and plan for life after it, often causing owners to experience an unexpected void. Those who take time to plan ahead — launching a foundation, mentoring entrepreneurs, traveling or starting a new venture — navigate the transition more smoothly.
Preparing emotionally is just as important as preparing financially, since the shift can be profound. Having resources in place, from financial advisors to executive coaches, makes the adjustment easier.
6. Starting late
Even without plans to sell, an exit plan prepares owners for the unexpected: an untimely death, an unsolicited offer, a partner’s decision or a market shift.
For those who plan to sell, beginning two to three years in advance allows time to refine financials, strengthen operations and build enterprise value. Early preparation also creates flexibility to address other gaps before they become obstacles.
Time is the one variable owners cannot buy back.
When to revisit the exit plan
An exit plan should evolve alongside business and personal life. Ownership changes, periods of rapid growth, market conditions, leadership departures or major life events are all signals to revisit the financial picture, timing and personal goals.
Thoughtful exit planning bridges the gap between the deal on paper and life after the sale. With the support of a collaborative, trusted team of advisors, owners can safeguard lifestyle needs, honor years of hard work and step into the next chapter with confidence and clarity.
Author: Christy Ray is a director and private wealth advisor at BMO Wealth Management, where she guides Arizona business owners with integrated wealth strategies. “BMO Wealth Management” is a brand name that refers to BMO Bank N.A. and certain of its affiliates that provide certain investment, investment advisory, trust, banking, and securities products and services. Investment products and services are: Not a deposit – not insured by the FDIC or any federal government agency – not guaranteed by any bank – may lose value. This information is being used to support the promotion or marketing of the planning strategies discussed herein. This information is not intended to be legal advice or tax advice to any taxpayer and is not intended to be relied upon as such. BMO Bank N.A. and its affiliates do not provide legal advice or tax advice to clients. You should review your circumstances with your independent legal and tax advisors.
