Most business owners track the same handful of numbers every year:

Those metrics matter. They tell you how the business is performing right now.

But they don’t answer a much more important question:

Is your business becoming more valuable?

Because revenue pays the bills.
Profit funds your lifestyle.

But business value creates wealth and optionality.

It determines whether you can sell your company, transition leadership, borrow strategically, or step back from day-to-day operations.

What Does It Mean to Treat Valuation as a KPI?

Treating valuation as a KPI means measuring and managing the factors that determine the market value of your business—such as profitability, risk, leadership depth, and revenue stability—on a regular basis.

Instead of evaluating performance only through revenue and profit, owners also track whether their decisions are increasing the company’s long-term enterprise value.

This changes how leaders think about hiring, pricing, operations, and growth.

Because every decision is evaluated through a different lens:

Will this increase the value of the business?

The Factors That Drive Business Valuation

Business value is not determined by revenue alone. Buyers evaluate companies based on risk, sustainability, and transferability.

Several core drivers influence valuation.

Profitability

Consistent and improving profitability signals operational strength and financial discipline. Businesses with stable margins typically command higher valuation multiples.

Transferability

If the business depends heavily on the owner to generate revenue or make key decisions, buyers see risk. Companies that operate successfully without the owner are significantly more valuable.

Revenue Quality

Recurring or predictable revenue increases buyer confidence. Businesses that rely on repeat customers or long-term contracts tend to receive higher valuations.

Leadership Depth

A capable management team ensures the company can continue performing after an ownership transition.

Operational Systems

Documented processes and strong systems make performance more predictable, scalable, and transferable.

Why Tracking Valuation Changes the Way Owners Lead

Most owners run their businesses using operational and financial KPIs.

They measure things like:

But very few track valuation as a performance metric.

When valuation becomes part of annual planning, the conversation shifts.

Leaders start asking different questions:

These questions align daily decisions with long-term wealth creation.

How Business Owners Can Increase Valuation Over Time

Improving valuation rarely comes from a single initiative. It results from consistent focus on the factors that reduce risk and improve performance.

Owners who want to increase the value of their business often focus on:

Even if a sale is years away, these changes make businesses more profitable, resilient, and enjoyable to own.

A Strategic Insight Worth Remembering

Revenue measures activity.
Profit measures performance.
Valuation measures wealth creation.

If owners want their businesses to create lasting financial value, valuation must become part of the conversation long before an exit is on the horizon.

Measuring What Matters

When valuation becomes part of your strategic planning process, your annual plan becomes more than a roadmap for revenue growth.

It becomes a value acceleration plan.

You gain clarity about:

From there, your strategy, KPIs, and leadership priorities can align around one question:

How do we build a business that becomes more valuable every year?

Final Thought

You don’t have to be planning to sell your company to benefit from building one that is valuable.

In fact, the businesses that are easiest to sell are usually the ones that are most enjoyable to own.

Because they:

And that’s what building a valuable business is really about.onal timeline. 

Ready to add Valuation as a KPI to your business? 

FAQs

What does it mean to treat valuation as a KPI?

Treating valuation as a KPI means regularly measuring and managing the factors that influence the value of your business—such as profitability, risk, leadership depth, and revenue stability—rather than focusing only on revenue or profit.

Why should business owners track business valuation?

Tracking valuation helps owners understand whether their company is becoming more attractive to buyers, lenders, and investors. It encourages strategic decisions that increase profitability, reduce risk, and improve transferability.

What factors influence the valuation of a business?

Business valuation is influenced by factors such as:

How often should a business valuation be updated?

Many advisors recommend reviewing valuation annually as part of strategic planning. This allows owners to identify risks, track progress, and prioritize the actions that will most improve the company’s value.

Can a company grow revenue but lose value?

Yes. Revenue growth can reduce value if it increases risk—for example, by creating customer concentration, operational complexity, or greater dependence on the owner.

What is the benefit of knowing your business value before selling?

Understanding your business value early gives owners time to address weaknesses, strengthen operations, and increase valuation before entering a transition or sale process.

Is valuation important even if I don’t plan to sell my business?

Yes. Businesses that are valuable are typically more profitable, resilient, and easier to operate because they rely on strong systems, leadership, and predictable revenue.

What KPIs increase business value?

KPIs that improve business value often include gross margin, customer concentration, recurring revenue, employee retention, and operational efficiency. These indicators help reduce risk and increase buyer confidence.

That thing you’re feeling—the stress, tension, and weight of running and growing your business—is friction. The more friction you face, the greater the effort required, making even routine decisions feel like uphill battles.

Every business owner I know, myself included, strives to reduce the effort needed to grow and be profitable. We implement systems, automate tasks, and lean on AI or standard operating procedures to smooth out operational bumps. But the hardest friction to remove—the kind that no app or process can outsource—is people friction.

People friction manifests in two distinct ways:

  1. The friction of loneliness and isolation
  2. The effort required to build authentic relationships and lead effectively

The friction of loneliness

The loneliness of leadership can feel like an invisible weight pressing down on every decision. You struggle to solve problems, evaluate opportunities, and take consistent action alone. You beat yourself up for knowing better but not doing better, questioning whether you lack the ability or the sheer will to succeed.

You try to ease the friction by reading books, watching videos, and replicating the success formulas of others. If they did it alone, surely you can, too. Or maybe you hire a coach who reinforces the belief that pushing harder and working faster is the solution—relying on willpower to force results.

But eventually, you realize that effort alone doesn’t work. You’ve exhausted yourself chasing formulas, methods, and hacks that haven’t delivered sustainable success. And because you’ve already sought help once (or several times) and it didn’t provide the relief you needed, you resist engaging the advisors who could walk beside you—not just offer advice, but truly expand your intellectual and emotional capacity to grow your business.

Sometimes, you avoid seeking deep, committed support from the outset, convinced you can't afford it, don’t deserve it, or won’t need it until you hit a major milestone. Maybe past advisors failed you, or you struggle to trust that someone could be fully invested in your success.

And so, you push harder—trying to create better results through sheer determination—only to generate more friction, because you’re still doing it alone.

The friction of leadership

Leadership friction stems from the gap between the effort required to listen, teach, coach, and elevate others—and the effort you’re willing (or able) to make.

You want employees to show up, do their jobs, leave distractions at the door, and be intrinsically motivated to grow. You want self-starters with adaptability, resourcefulness, emotional intelligence, and strong communication skills.

To ease the burden, you hire better, pay more, or delegate leadership responsibilities. Yet, despite these efforts, employees still need your time, guidance, and support. They need you.

You prioritize doing the work of the business, thinking that hiring managers and coaches will fill the gap—but without investing in a culture of leadership development, your efforts fall short. Employees become frustrated. You become overwhelmed and even resentful.

As your team’s needs grow, your ability to scale your business slows. Every attempt to bypass the work of building a high-performing, values-driven workplace creates more friction, not less.

"Friction tells us where things are straining, where care is needed, and where attention should go." - Kayla Scanlon

Your business’s nervous system is experiencing the friction. And you are experiencing the pain it creates.

If this pain has been lingering, it’s a sign that what you’re doing isn’t working. Not because you’re ineffective—but because the approach isn’t yielding the desired results.

Reducing friction starts with you

The friction and the pain it causes have your attention. So now, ask yourself:

When you pinpoint the friction within your business—when you act with care and intention to reduce effort and improve results—you create conditions that ease strain, remove barriers, and accelerate growth.

Reducing friction from loneliness & isolation

1. Build a Circle of Trusted Advisors : Many business owners believe they must "go it alone" to prove their competence. But having advisors and others who walk beside you—rather than just offering occasional advice—expands your capacity to make informed, strategic decisions.

2. Create a Decision-Making Framework: Loneliness amplifies decision fatigue. Without a clear framework, business owners second-guess themselves, delaying action or making reactive choices.

3. Cultivate Vulnerability & Self-Awareness: The pressure to appear competent can lead to self-imposed isolation. Admitting uncertainty isn’t a weakness—it’s a growth strategy.

Reducing friction by investing in leadership development

1. Shift From Transactional to Relational Leadership: Business owners often seek “self-starters” who require minimal guidance. But leadership development isn’t about hiring perfect employees—it’s about creating the conditions for growth.

2. Replace “Hiring for Skills” With “Hiring for Potential”: Skills can be taught—attitude, adaptability, and values alignment must be prioritized. This shift in your approach to talent management from performance to performance + potential is crucial for successful succession planning.

3. Lead With Clarity & Consistency: Many employees disengage not because they lack motivation, but because the path forward isn’t clear.

Looking for more help to grow strategically?

FAQs

Why does business growth often create friction?

As businesses grow, complexity increases—more people, more decisions, and more moving parts. Without clear systems and leadership structure, that complexity creates friction that slows progress.

What is business growth friction?

Growth friction refers to the challenges that emerge as a business scales, including decision bottlenecks, unclear roles, leadership gaps, and operational inefficiencies.

How can a strategic business advisor help reduce growth friction?

A strategic advisor helps identify root causes of friction, improve decision-making, strengthen leadership, and create systems that allow the business to scale more effectively.

Why is leadership development important for business growth?

As a business grows, success depends less on the owner and more on the strength of the leadership team. Developing leaders helps distribute responsibility and improves execution across the organization. It's the first step in succession planning.

When should a business owner consider working with an advisor?

Owners often benefit from advisory support when growth begins to feel harder, decisions are slowing down, or the business is becoming too dependent on them.

How do you know if your business is experiencing growth friction?

Common signs include constant decision escalation to the owner, lack of accountability, repeated operational issues, and slower progress despite increased effort.

Can business growth happen without increasing stress and workload?

Yes. With the right systems, leadership structure, and strategic guidance, businesses can grow in a way that reduces owner stress, increases valuation, and improves overall performance.

More FAQs

Back in February, Dr. Donna Marino and I hosted a LinkedIn Live conversation about the how myths, personal beliefs, and emotions play a significant role in family succession planning.

That conversation became the inspiration for an article we co-authored for Family Business Magazine in which we talk about the need for frequent, candid conversations and the important role trusted advisors play in helping families navigate the complex and often complicated landscape where family relationships and business continuity collide.

Whether you started the business or are helping carry it forward, the responsibility can feel both meaningful and complicated.

My family business

My personal experience with family business succession planning is one of unspoken expectations, avoidance, and a distinct lack of planning. Despite having years during a long illness to talk with me and my siblings, as well as his own brothers, about the current state of the business and what might happen when he was gone, my dad stayed silent on the matter. It wasn't until he died that we found out he left the business to one of his brothers and that my uncle was only willing to accept the bequest if we (his nieces and nephews) used my dad's life insurance to pay off the debt.

What followed was months of conversations about "this is what your father would have wanted" and coming to terms with how my uncle's feelings of entitlement and being 'owed' something collided with the reality that my dad's business was not financially viable and the things my uncle had done to help my dad 'run' the business during his illness prolonged the inevitable need to cease operations.

In hindsight, one might say that my siblings and I could've started the conversations my father wanted to avoid. I even thought that myself - that I had failed to push the issue and force the conversation. Realistically though, as I approached my 40th birthday I was still my dad's child. I knew he would shut down and shut me out if I brought up things he didn't want to talk about or deal with. I knew I couldn't force him to do anything. And I didn't want to fight with him. He wanted to avoid the reality of his illness, his mortality, and a failing business, as well as the emotions and expectations of his children and siblings, so we didn't talk about it. Frankly, no matter how many times I rehearsed my opening line and talking points, when the time came I could never bring myself to address the situation directly.

That saddens me because it meant he dealt with a lot of financial worry by himself when he didn't need to, and he left a lot for us to deal with in his absence. It also saddens me because I know our family's experience is more of the rule than the exception. But it doesn't have to be that way.

"One of the things we often miss in succession planning is that it should be gradual and thoughtful with lots of sharing of information and knowledge and perspective, so it's almost a non-event when it happens." Anne M. Mulcahy, Family Enterprise Foundation

Collaborate and communicate

To be clear, I didn't know how to start these conversations with my family and we didn't have someone like me or Donna Marino to help us figure it out. When it's you and your family, old habits, communication patterns, and decades of relationship baggage make it hard to do this work alone. In fact, it may be an unreasonable expectation. I know first-hand that it's not enough to know what you should do. You need someone who has the experience and emotional distance to initiate and facilitate some of the hardest conversations you may ever have.

Because taking care of a family business isn’t just about protecting what was built.
It’s about deciding what it needs to become.

With that in mind, I suggest the following for those who want to become more intentional about their relationship to their family business, explore what a 'good' transition might look like, and engage an advisor to help you talk about tough topics and make important decisions.

If you're the business owner:

If your the family member:

For more information about how Purpose First Advisors can help you and your family plan for the future, visit our strategic business advisors page or schedule a free consultation.

FAQs

What makes family businesses different from other businesses?

Family businesses involve overlapping roles between family relationships and business responsibilities, which can create both unique strengths and complex challenges.

Why is managing a family business often more complicated?

Decisions in family businesses are not just strategic—they are personal. Emotions, history, and relationships can influence leadership, communication, and decision-making.

How can family businesses balance relationships and business decisions?

Clear roles, open communication, and agreed-upon expectations help separate family dynamics from business decisions while maintaining trust and alignment.

When should a family business start succession planning?

Succession planning should begin well before a transition is needed. Early planning allows time to develop future leaders and align family members around the future of the business.

What are common challenges in family business transitions?

Common challenges include unclear leadership roles, differing expectations among family members, communication breakdowns, and difficulty separating personal and business decisions.

How can family businesses prepare the next generation for leadership?

Preparation includes leadership development, clear expectations, exposure to different parts of the business, and ongoing communication about roles and responsibilities.

Why is communication so important in family businesses?

Strong communication helps prevent misunderstandings, aligns expectations, and supports both the health of the business and the relationships within the family.

How can family businesses protect both the business and the relationships?

By creating clear governance structures, defining roles, and having proactive conversations about the future, family businesses can support long-term success while preserving relationships.

More FAQs

Sometimes the people who can get you to really think about what's next - how long you want to keep working, what will happen if you suddenly can't work, how much you want to work, what selling could look like - are spouses, children, and employees.

Who in your life wants to know - deserves to know - what your succession plans are?

Even if you're scared, overwhelmed, or intimidated by the prospect of things changing, might the concerns and need for clarity from people you care about be the encouragement you need to prioritize finding someone to talk with about business exits, leadership transitions, and ways to preserve your legacy?

The questions my client's employees were asking her about the future combined with her growing desire to work less got her to make the call.

“I thought I’d work forever and forever is now,” is what she said when I asked her what had changed, and why she was reaching out to talk about selling her business.

She took a sip of her coffee and said, “I’m well past retirement age, my employees want to know what my timeline looks like, and I don’t want to work this hard anymore. At the same time, I’m trying to cut back on my hours but I keep going to the office. I’m freaked out about what I’ll do when I’m not working but also tired and ready to work less.”

“This all makes sense and almost every business owner I talk to can’t imagine not working. Frankly, I’m really glad your employees have been bugging you for a plan and you’re ready to talk.”

“Yeah, it's time. I’d like to start slow, maybe with an with an emergency succession plan and go from there.”

I smiled and said, “That’s a great place to start. That process will open up your thinking about how you run your business, what you might want to keep doing while you scale back your hours, and what legal documents and internal processes you need in place to ensure business continuity in the event you become incapacitated (or fly off for an extended Tahitian vacation.)"

“Oh, I’m the only one who writes proposals, does invoicing, does the banking - there's a lot of things that no one else does,” she said.

I exclaimed, “I know! That’s why your employees want to know what the plan is and I want to help you train them to do these things so a potential buyer will be confident that the business can run profitability without you.”

She smiled, lowered her head and raised her eyes, “I get it. I’ve just never had to train anyone on the things I do and so many little details and nuances live in my head.”

“Yeah, " I said “and it means that you’ve built a $3m business with one hand tied behind your back.”

"My job is to help you think about what will make your business most attractive to potential buyers and create as many of those conditions as possible. High owner dependence makes your business less valuable. So does a lack of standard operating procedures and cross-training.”

I went on to say, “For you to work less, others need to work more or we need to hire other people to take on different roles. You need to train them and let them practice doing new things. You need to teach them all the things you do instinctively that make this business successful.”

She leaned forward and said, “I do have one person I’ve been showing how to do some things and she might even be interested in buying the business.” she said. “It’s important to me to help her do that when we’re both ready.”

I smiled and said, “That’s so good to know. What a wonderful thing to work toward!

I made a note and explained, “that means it’s also important for you to start making financial decisions based on demonstrating consistent, reliable cash flow. If your employee eventually needs a bank loan to make this deal work the bank will want to see the numbers that tell them the business can service the debt.”

“Fortunately, we have time to document, train on, and delegate your responsibilities before we go to market. And we have time to get your financial documents in order in anticipation of due diligence and an underwriting process.”

With a sigh and a smile she said, "It's a good thing I’m not ready to be ‘done, done’ tomorrow. This sounds like a lot of work!”

“It is.” I put down my pen and said, “which is why it's always best to run your business to be exit ready and transferrable regardless of whether you are ready to or interested in selling. Now the most important thing is to get started and make these changes."

“Let’s get focused. I’m ready to do it,” she said, sitting up a little straighter in her chair.

Getting focused helped this owner increase revenue 34% and profit 137% YOY, update her estate plan, review her wealth management strategies, create an emergency succession plan, identify a prospective buyer, and set an asking price 40% higher than initially anticipated.

Even if you think you’re going to work forever, you might change your mind. Let’s talk about integrating succession planning and value acceleration strategies into your annual growth plan to position your business to be as appealing as possible to potential heirs or buyers. That gives you more business exit and transition choices whenever you decide to change your role in the business or sell.

FAQs

Why do employees start asking business owners about succession plans?

Employees often begin asking about succession when they notice signs that the owner may eventually step back—such as changes in workload, age, or business direction. These questions usually reflect concern about stability, leadership continuity, and their own future within the company.

When should a business owner start talking about succession plans?

Ideally, owners begin discussing succession and transition plans five to ten years before a leadership change. Early conversations allow time to develop leaders, strengthen systems, and create a thoughtful transition strategy.

Why do many business owners avoid succession planning conversations?

Succession planning can raise difficult questions about identity, retirement, leadership readiness, and the future of the business. Because these topics are both strategic and emotional, many owners delay the conversation even when they know it’s important.

What are the risks of avoiding conversations about the future of a business?

When succession planning is avoided, uncertainty can grow among employees, family members, and leadership teams. This uncertainty can lead to confusion about decision-making, reduced confidence in long-term stability, and missed opportunities to prepare the business for transition.

How can business owners start conversations about the future of the company?

Owners can begin by sharing their general thinking about the future of the business, asking key team members about their goals, and exploring what a successful transition might look like for everyone involved.

Who should be involved in succession planning conversations?

Succession planning often involves a mix of stakeholders including the owner, potential successors, senior leadership, family members (if applicable), and trusted advisors who can help guide the process.

Why do early succession conversations strengthen a business?

Early conversations allow organizations to identify leadership talent, clarify expectations, and strengthen systems so the company can continue operating successfully through future transitions.

More FAQs

Every generation - no, actually, every individual - has their own ideas about what work is, how much and for how long they want to work, and what retirement will look like for them. 

Which is why some days I’ll talk to a current owner who is 60+, never plans to completely stop working, and needs income from the business to fund their retirement while the future owner is in their 30s and sees work as a means to living the life they want, not a calling.

Or an owner who is in hospice and still booking new business while their successor wants to retire. 

Or an owner who isn’t ready to sell but is very eager to be out of direct client work and day-to-day operations while revenues can’t currently support new hires. 

Or a prospective client who chose the hard work of being an owner to have the freedom to ‘do things how and when I want to do them,’ but sees profits (and the freedom they bring) declining. 

The more in touch you are about what work is and what it means to you the more likely you are to 

You can start getting more comfortable with the ‘big’ questions related to work, retirement, your life’s purpose, and your legacy by asking yourself questions that shift your thinking from “who am I related to others?” to  “who am I at my core?” Try one of these: 

1. The "Who Am I?" Challenge

  1. What do these words reveal about you?
  2. Do they align with how you see yourself when you’re alone?
  3. If few words remain, what does that say about how you define yourself?
  1. If your list feels empty, what traits would you like to define you outside of relationships?
  2. How can you strengthen those aspects of yourself?

2. The Subtraction Method

3. The “What Would Stay?” Exercise

4. The Mirror Test

5. The “Five Lives” Exercise

6. The Inner Compass Test

Contact me to learn more about how Purpose First Advisors can help you get the most out of your business and plan for ‘what’s next.’

VoyageSTL Article

At the end of 2024, Voyage STL asked me to share my story for readers (link above.)

In my responses, I look the liberty of going back to the beginning, which for me is being born into a family business. Dee’s Florist was my grandfather’s dream and my dad’s occupation.

My dad was one of those business owners who planned as far out as the next big sales cycle - think Valentine’s Day, Mother’s Day, and Christmas. He wasn’t an innovator. He didn’t change with the times. He ran the business the best he could for as long as he could.

When he died, there wasn’t much for the next generation because it wasn’t built for us. It was built to be an income source for my dad and our family. As such, in a less than orderly fashion, the business was dissolved more than a decade ago.

My family business experience was profoundly impactful in my life. It created some amazing memories and wonderful experiences. And it was the setting for some hardship, hurt feelings, and heartache.

There’s nothing wrong with wanting to run a business that creates the lifestyle you want and ceases operations when you are ready to be done working. In those circumstances you plan and execute an orderly dissolution.

What is problematic is running a business that

All business owners WILL EXIT their business eventually.

Even if you plan to leave the details to your executor, you owe it to them to have a well designed plan with all the legal and financial documents in order to take care of the business of your business when you’re gone.

So go ahead, work forever. But please do so

  1. In a way that allows you to generate the income, savings and personal freedom you deserve to live the life you love, and
  2. With an emergency succession plan (for the ‘what if’s’ of life) and a thorough, professional estate plan.

Learn more about how we can help you get the most out of your business and plan for the future to protect and grow what you have and the people you love.

Many business owners think exit planning is something you start when you're ready to sell your business.

But that assumption creates one of the biggest strategic blind spots in entrepreneurship.

Exit planning isn’t about leaving your business.
It’s about building a business that can thrive without you.

In that sense, exit planning is simply good strategic planning.

When owners think about the future of their business—how it grows, who leads it, how profits are generated, and how the company could operate without them—they are already doing the work of exit planning.

The difference is intention.

When exit planning becomes part of strategic planning, owners start asking different questions:

These questions don’t just prepare a business for sale.

They create stronger companies.

Companies that are more resilient, more profitable, and ultimately more valuable.

And whether you plan to sell, transition leadership, or simply work less someday, those are exactly the kinds of businesses most owners want to build.

What Is Exit Planning?

Exit planning is the process of preparing a business and its owner for an eventual transition of leadership or ownership.

It focuses on strengthening leadership teams, improving operational systems, increasing business value, and aligning the business with the owner’s long-term personal and financial goals.

Despite what many people think, exit planning isn’t just about selling a company.

It’s about ensuring the business you’ve worked so hard to build can continue to succeed when leadership eventually changes—whether that transition happens through a sale, succession, merger, or simply the owner stepping back.

Why Exit Planning Should Start Long Before an Exit

Most owners spend years—sometimes decades—building their companies.

But when it comes to planning for the future of that business, many assume they can figure it out when the time comes.

Unfortunately, transitions rarely work that way.

Businesses that successfully transition leadership or ownership typically spend years strengthening the foundations that make the company transferable.

That includes:

These changes don’t just prepare a business for an eventual transition.

They also make the company more profitable, more resilient, and easier to run today.

Strategic Planning With the End in Mind

When exit planning becomes part of strategic planning, owners begin to see their businesses differently.

Instead of focusing only on next quarter’s revenue or next year’s growth targets, they start thinking about how their decisions affect the long-term value and sustainability of the company.

They begin asking questions like:

These questions help owners build companies that are not only successful today but prepared for the future.

A Simple Shift in Perspective

One of the most powerful shifts an owner can make is this:

Stop thinking about exit planning as something that happens at the end of your career.

Start thinking about it as a strategic framework for building a better business.

Because the truth is, every business owner will eventually transition out of their company.

The only real question is whether that transition happens by design or by default.

Owners who begin planning early give themselves far more options.

And those options begin with one simple realization:

Exit planning isn’t the end of the story.
It’s how you build a business that lasts.

FAQs

What is exit planning for a business owner?

Exit planning is the process of preparing a business and its owner for an eventual transition of leadership or ownership. It involves strengthening operations, leadership, and financial performance so the business can continue successfully without the owner.

Is exit planning only for owners who want to sell their business?

No. Exit planning helps owners build stronger, more transferable companies regardless of whether they plan to sell, pass the business to family, transition to employees, or simply step back from day-to-day operations.

Why is exit planning considered strategic planning?

Exit planning aligns long-term business strategy with the owner’s personal goals, financial objectives, and timeline. By focusing on value creation and leadership readiness, it shapes the decisions owners make about growth, investment, and leadership development.

When should a business owner start exit planning?

Ideally, exit planning begins five to ten years before a transition. Starting early allows owners to strengthen leadership teams, improve systems, and increase the value and transferability of the business.

How does exit planning increase business value?

Exit planning focuses on improving the factors buyers care most about, including predictable cash flow, leadership depth, operational systems, and diversified revenue sources.

What happens if a business owner doesn’t plan their exit?

Without planning, many businesses struggle to transition leadership, maintain performance, or find buyers. Early planning increases the likelihood that an owner can transition on their own terms.

What is the difference between exit planning and succession planning?

Succession planning focuses on identifying and preparing future leaders, while exit planning is a broader strategy that includes succession, valuation, financial planning, and ownership transition options.

More FAQs

Design your business to meet your goals

It’s a sunny Sunday morning on the last weekend in August and 5-6 people are queued up at the entrance to our local bookstore waiting for the doors to open.

Before the clerk can turn the key and fully open the door, an older woman made her way through the half-open door while very loudly proclaiming “It must be nice to have people waiting at your door to buy things from you.”

As she sweeps past the young woman who’s now holding the door open for other shoppers, her comment hangs in the air like an accusation, not a compliment.

“It Must Be Nice” always sounds accusatory, with a tinge of jealousy and dismissiveness mixed in. It implies that someone is enjoying an unearned or perhaps fair privilege compared to the rest of us and should feel contrite about it.

Perhaps someone has said something like this to you

How did it make you feel?

Not great right? But why?

Why are they trying to make you feel bad about what you worked so hard to achieve? And why do you feel the need to defend yourself or explain how hard it was to get where you are?!

The thing is, just because you are able to enjoy those things - less worry, a flexible schedule, financial freedom, peace of mind - doesn’t diminish anyone else's capacity to have the SAME THING. Anyone can build a business that fulfills their personal, business and financial goals.

Most people never do.

The best, perhaps only, response to ‘It Must Be Nice’ is, ‘Thanks, yes it is.’

If you’re looking at your peers and ‘It Must Be Nice’ is creeping into your thoughts, it might be because your business is running you, you’re not running it.

A business that fulfill your deepest desires requires a future-focus, intentional planning, and relentless execution. What’s NICE to have or be didn’t just happen for those owners - it was earned. Ideally, it was earned through a combination of clarity, intention, consistency, delegation, leadership and personal accountability and not through brute force or a belief that success requires sacrifice and suffering.

If you feel some resentment fueling your feeling that ‘It Must Be Nice,’ I suspect your 'keep your head down, nose to the grindstone, work harder, and make more sacrifices for an eventual payoff approach' isn’t working for you anymore.

Likewise, if you have been able to hit some of the ‘It Must Be Nice’ milestones but you did it at great personal cost - to your physical and mental health, finances, relationships - and feel like you just can’t summon the strength to do the next push,

You don’t have to.

What got you here doesn’t have to be and may not be able to get you where you are going.

Even if it can, you can choose another way.

That’s what we do at Purpose First Advisors - we help you build a business that will make you say things like “It’s SO Nice to”

Learn more about how our growth coaching and consulting services can help you spend more time on white sandy beaches (or on ski slopes, whichever you prefer!) and less time in conference rooms.

Succession planning excites me!

Seriously, I love having things organized.

I also love a good contingency plan so that IF/when things go sideways the people who count on me aren't left floundering. 

If you love feeling

- prepared

- confident 

- organized 

- ahead of the curve

Then succession planning will be a very satisfying experience!

For those new to the experience, I recommend starting with an emergency plan. This covers the 'what if' situations that you can't possibly foresee, are highly unlikely but could happen. 

It's like an insurance plan - it creates peace of mind but without an annual premium!

Getting started

An emergency succession plan covers 3 scenarios:

1. Unplanned, extended absences

2. Planned, extended absences 

3. Permanent disability or death

Starting with scenarios 1 and 2,

Think about 

- WHO you want and who is capable of running your business on your behalf as an acting executive. Who shares and embodies your vision? Who knows the business of your business and can make sure everything is working to maintain a profitable operation until you return? Who will the rest of the team respect and follow?

You'll also want to talk to that person to make sure they are comfortable being designated for that role.

- WHAT needs to be done to keep things running. What things do you do? Does anyone else know how to do them? What might they need to do and do well for an extended period of time without your input or oversight?

- HOW things will keep moving while you're gone. Is process documentation complete and updated regularly (especially of things you do and are responsible for)? Has your acting executive been trained on your duties and have the opportunity to do them independently? Do they have the permission and access to all documents, systems and relationships needed to act on your behalf (passwords, bank signing privileges, payroll or accounting systems, key advisors and professional service providers, etc.)

For scenario number 3, you need to take the additional steps of making sure to

1. Include your business in your estate plans. It's a good idea to make sure your estate planning and legal counsel are on the same page regarding succession plans and the legal documentation needed for things to go the way you want them to when the time comes. They might talk to you about financial power of attorney for the business, creating a trust, reviewing your operating and buy sell agreements, etc. 

2. Talk to your executor so they know your intentions for the business. 

3. Leave instructions for the acting executive re: contacting and working with your estate. 

So where's the exciting part?! 

The Ultimate Win-Win

I hope that as you think about preparing for the scenarios that might unexpectedly take you away from your business you get excited about creating a near-term plan that takes things off your plate. 

Training your team to operate without you can immediately improve your freedom, flexibility and level of ownership autonomy. There is no need to wait for a worst case scenario to put your plan into practice. 

When your business can but doesn't have to run without you, you truly get to experience the benefits and privileges of ownership. And you can achieve this level of delegation and independence in a way that 

- empowers your team,

- reduces risk and concern about business continuity (people like job security!),

- retains your levels of ownership and control, and

- increases the transferability and value your business.

Purpose First Advisors specializes in helping business owners create succession plans that de-risk your business while increasing value and personal freedom.

You probably think you only need to get a business valuation when you need to value the asset in a divorce or when preparing for a sale.

What if it became one of your annual measurements of the financial health, strategic direction, and overall performance of your business?

What if regularly monitoring your valuation metrics helped you dial in and amp up your growth strategies and tactics through an additional lens, one that looks at value and wealth creation in addition to income and profitability?

How might you approach your decision-making differently even if you never plan to sell?

Here’s my take on why adding an annual valuation to your growth planning can be a game changer for your business and your family:

1. Close Your Wealth Gap

Have you ever wondered if all your hard work will actually pay off some day? An annual valuation acts as a clear indicator of whether your efforts, investments and sacrifices are yielding long-term value. Your Wealth Gap is a key metric a valuation can help you benchmark and measure over time. Your Wealth Gap is calculated by subtracting your current net worth (not including the value of the business) from your wealth goal (usually a retirement or lifestyle goal). Usually the only way to close that gap is to build and extract (i.e., sell) that value from your business. 

Not surprisingly, this metric ties into having a clear vision for ‘What’s Next’ for you and your business. Decisions like whether to retain ownership and/or to keep working in your business depend on what you want to do with the rest of your life. If you need more money to achieve your personal and financial goals, then it makes sense to plan to grow your business in ways that increase its value so you can make the most of this investment. By tracking your business’ valuation over time, you can measure how effectively your business is contributing to your personal net worth. 

2. Close Your Profit Gap

In a valuation process, Purpose First Advisors will plot your business on a range of multiples for your specific industry. Using our Business Attractiveness and Owner Readiness assessments we’ll evaluate where your business ranks compared to best-in-class competitors. By benchmarking where your business falls on the range of values you can determine your Profit Gap - the amount of profit your business could be generating if it performed like its best-in-class peers.   

When you hone in on where inefficiencies exist and improvements can be made your growth plan becomes more focused and effective. Your growth plan becomes a Value Acceleration process that increases value, wealth and profit. 

3. Close Your Value Gap

Plotting your business on a range of values reveals both the Profit and the Value Gap. If your profit is below that of your best in class industry competitors, then your value is lower too. There is a gap between the current value of your business and how it could be valued once value is increased. 

In addition to taking into account key financial metrics such as revenue, profitability, and cash flow, a Purpose First Advisor’s valuation will include intangible, but very real, drivers of value including the level of owner dependence, client concentration, process documentation, customer loyalty, and the strength of your team. Future prospective owners - internal and external buyers as well as family - will evaluate the health of the business using these criteria and an annual valuation is one of the best ways to assess your progress in identifying and preventing anything that can comprise the long-term health of your business. This clarity also transforms a growth plan into a Value Acceleration process designed to close all financial gaps. 

4. Be Prepared for a Business Sale or Succession

You are an investor in your business. Knowing your current valuation helps you understand how your investment is performing compared to other investments in your portfolio. Why is this important?

  1. If you want to pass your business on to your children, you want them to inherit a valuable asset, one that not only provides income but has value on the open market.
  2. If you are thinking about having a key employee(s) purchase the business, a valuation helps them understand the value of the investment they would be making and start the conversation about financing and tax planning sooner rather than later. 
  3. Sooner is also better if you think you might, one-day, want to sell to a third-party, you will want to know sooner.
  4. Opportunity may come knocking and you want to be ready to evaluate unsolicited offers. 

5. Be Bankable

The saying goes, get credit before you need it. Your business valuation can be a key metric when securing a bank loan or financing. Lenders often look at the value of the business to assess creditworthiness. By tracking valuation as a KPI, you can maintain a good financial position to qualify for loans or lines of credit, especially when planning for growth or expansion.

Purpose First Advisors specializes in helping business owners Value Acceleration Plans that allow them plan and execute strategic growth. Start your FREE Business Valuation and 1-hour consultation here.

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  • I have said many times to colleagues, “I wish I had hired Christy Maxfield a few years ago.” Even with a 27-year-old company, I have learned so much from her. Christy has been an invaluable partner helping me operate my company more strategically, i.e. strengthening financial reporting, guiding succession planning, navigating complex people decisions, and increasing the overall value of my business. Christy brings insight, clarity, and genuine care to her work. Her disciplined approach and guidance has made me a more confident and effective business owner and positioned my company for its next phase of long-term success.
    Laurna Godwin
    Owner, Vector Communications
  • Christy’s coaching has has been instrumental in elevating my business to new heights. Her ability to facilitate strategic conversations has been transformative, helping me identify opportunities, overcome obstacles, and refine my business strategies for optimal results.
    Paya Sample
    Owner, Peak Leaders Collective
  • Christy took the time to assess my business model, understand my goals, and identify areas for improvement. What impressed me most was her ability to provide tailored strategies that were practical and immediately implementable.
    Sue Bailey
    Owner, Celebrating Life Cakes
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