Most CEOs plan an exit the way they’d plan a garage sale. They wait until they want out, then scramble to make the business look good for a few months. Brett Sharenow, CEO of Broadscope Consulting, has personally helped companies raise more than $920 million and closed deals worth $6.4 billion. He will tell you the businesses that sell well never scrambled. They spent years making themselves replaceable.
Quick Answer
CEOs get their exit wrong by treating it as a financial event instead of a leadership decision. Glenn Gow has interviewed more than 130 CEOs on The Scaling Executive Podcast, and the pattern is consistent: the businesses that sell for the most are the ones where the founder already handed off the client relationships and the strategic decisions. A business a buyer cannot run without you is a business a buyer will not pay full price for. Start removing yourself from the daily operation of the business two to five years before you plan to sell, not two to five months.
The Founder Is Usually the Reason the Business Won’t Sell
A buyer is not purchasing your relationships. A buyer is purchasing a system that produces revenue without you standing in the middle of it. Karl Hughes, CEO of Draft.dev, put it bluntly when he explained how buyers value service businesses: “You really don’t want to be like the lead strategist for clients if you want to sell your business. Cause that means how am I going to replace you? You’re like, you know, this entrepreneur who’s also lead strategist owns all the relationships with clients, owned all the coordination of effort. No way I can replace you as a terrible business to buy, right?”
Patrick Brown, CEO of Unity Communications, hit the same wall from a different direction. He walks his EBITDA targets backward from a five-year exit date, then pushes those numbers all the way down to what his front-line staff do every day. That only works if Patrick is not the one doing the work himself. He is direct about the mental shift required: a CEO must accept that nobody will do the job exactly the way he does it, and build the documentation that lets someone else do it well enough.
Two Ways to Get Ready, and Only One Requires a Calendar Reminder
CEOs split into two camps on timing. One camp picks an exit date and counts backward. The other runs the business every day as if a buyer is already watching, with no date on the calendar at all.
Brett tells founders to start telegraphing value to acquirers two to three years before a sale, a process he says has to begin early: “You need to set that up two years in advance of the acquisition. So we’re working today for a two year, three year out acquisition. Who are the potential acquisition companies? How are we telegraphing to them that we’ve got some huge advantages for them?” Patrick stretches that same discipline to five years. Neema Mahdavian, CEO of Mediacy Global, has sold close to seven companies using a tighter one-to-two-year window built around a repeatable formula for stability and buyer fit.
Steven Monterroso, CEO of ShareVault, argues the calendar is the wrong tool entirely, and pins the failure on CEOs who wait for a buyer to show up before they get ready: “I think the major challenge is that they waited for the event to happen versus operating their business deal and deal readiness mindset,” he said. His framing is simple: “Companies are bought not sold. And you want to be prepared when someone comes and knocks on your door and says, hey, I’m interested in buying your company.”
| Approach | What It Requires | What It Produces for the CEO |
| Reverse-engineered timeline (Brett, Patrick, Neema) | A fixed exit date, backward-calculated EBITDA and margin targets, a telegraphing plan to named acquirers | A predictable auction with multiple bidders competing on a schedule the CEO controls |
| Continuous deal-readiness (Steven) | Daily operating discipline that treats every customer and contract decision as if a buyer is already watching | A business that can say yes to an unexpected offer without a scramble |
Neither camp disagrees on the outcome. Both refuse to let the founder stay indispensable, whether the exit is five years out or shows up next Tuesday.
Growth at Any Cost Is the Fastest Way to a Bad Exit
Omar Sahyoun, CEO and founder of Brand Fx, has watched founders chase venture-backed growth targets straight into a wall. “Sometimes you buy to just clean it off, but that’s not a successful exit. That’s a unfortunate exit, right?” He pushes founders toward old-school operator fundamentals instead: profitability and revenue you can explain to a stranger in ten minutes.
Mark Wald, CEO of SPRCHRGR, sees the same failure show up in diligence. His firm prepares companies for a sale or a capital raise, and he described what he finds this way: “We help businesses prepare for a sale or prepare for raising capital. And that’s oftentimes where we find where the bodies are buried and we have to dig them up and fix them, metaphorically speaking.” The cost of those shortcuts is not only labor. Mark said it directly: unwinding sloppy work late in the process “costs in terms of reputation and timing, because that might slow down the process that might undermine your enterprise value and the cost that, you know, the price that you get to exit for in the end.”
I have sat across the table from CEOs who wanted to maximize business sale value in the final six months before a deal. By then, the fixes are expensive and the buyer has already seen the mess. The founders who protect their sale price start the cleanup years earlier, while there is still time to fix a problem quietly instead of explaining it in diligence.
Most CEOs Can’t Explain Why a Buyer Should Care
A buyer does not pay for a good story. A buyer pays for cash flow they can predict. Karl explained the math agencies and service businesses get valued on: “We value agencies and everybody who buys agencies marketing or other service businesses like that, we value them on a multiple of cash flows. So that’s net profit that comes through the business plus maybe what it pays the owner.” If a CEO cannot show a buyer that number cleanly, the story stops mattering.
Brett sees the same gap from the fundraising side of the table, and the number he shares is not small. “I would say that 90% of the CEOs that come to me for help raising capital cannot articulate a compelling case for customers,” he said. Brett spends the first session of every engagement making founders say that case out loud until it holds up under questioning. Business valuation for an exit is built on that case, repeated across every customer segment a buyer will ask about.
Revenue Concentration Looks Fine Until You Try to Sell
Steven warned that a decision that looks smart during normal operations can quietly wreck a valuation later. A single dominant customer segment feels efficient when a CEO is running the business day to day. He described the risk this way: “Some CEOs might be thinking, hey, it’s OK to have a customer-centric, heavy-populated, in one segment industry… but it can actually hurt you when you do decide to sell your business.”
Increasing business valuation before a sale often comes down to spreading that risk on purpose. I tell CEOs to diversify customer segments two or three years ahead of a sale, because that removes the exact objection a buyer’s diligence team is trained to look for. Waiting until a buyer raises the concentration issue in a term sheet is too late to fix it.
The Last Mile of a Deal Is a People Problem
Financial readiness gets a company to the table. What happens to the people determines whether the deal holds together after signing. Jeff Helfgott, CEO of Boardroom Salon for Men, treats the human side of an acquisition as work that starts before the paperwork does. His rule: “Make people part of the change, not a victim of it.” He warned about a specific failure pattern he calls the “whiplash” effect, where an acquirer flatters a team through the courtship phase, then flips the tone once the deal closes: “The acquiring group is in a really interesting place. There’s the flirting stage before the deal is done, where you’re telling them you’re a great operator… And when you start working together, the tone can change to, now we’re gonna do things our way.” His fix is to start those hard conversations before the letter of intent is even signed, so the retained team hears about changes from him first.
Darren Kimura, CEO of AISquared, sees the same risk from the acquirer’s side of the table. Technology acquisitions are usually about the people who come with the company, not the code. “In technology, we tend to acquire companies largely for their people,” he said, and a poor cultural fit undoes the value of the deal regardless of what the financial model predicted. Darren also flagged a leadership trap that shows up after the ink dries: changing the strategy that was pitched to the board and investors. He has watched that single decision “begin to impact everything else, the overall strategy, the confidence in you, your ability to execute.”
A Good Exit Is One the Whole Team Sees Coming
Omar‘s sharpest distinction is between an exit that happens to a company and one the company builds toward together. A “happy exit,” in his words, requires the team to know the sale is coming and to benefit from it, whether through better pay under a larger parent company or a stake in the outcome through stock options. The alternative, an exit that surprises the staff, tends to produce the exact turnover and disengagement that erodes the deal Darren and Jeff both described.
Neema starts with stability before he starts building toward an exit. He described the full sequence: “Building some sustainability, some track record, and then slowly looking for an exit and exiting it to another larger company that either wants to scale or do whatever that they want to do or have it fit into their portfolio.” An exit strategy plan built on a track record gives a buyer’s team fewer surprises to find, and gives the CEO’s own people fewer reasons to walk out the door mid-negotiation.
I have interviewed founders who spent three years building a business only their name could run. I have interviewed other founders who spent those same three years training their replacement. The second group got paid more, every time.
FAQ
What are the biggest exit strategy mistakes CEOs make?
The costliest mistake is optimizing for the next funding round instead of the next buyer. Brett said it plainly: a lot of founders focus on raising money but never build the operating discipline a buyer will actually pay for. Glenn Gow sees that mistake paired with two others just as often: staying the only person clients call, and letting operational shortcuts sit unresolved until a buyer finds them in diligence.
How early should I start planning my exit?
Two to five years, depending on which approach fits your business. Patrick backward-engineers a five-year runway from his target EBITDA. Brett works on a two-to-three-year runway. Glenn Gow has heard both approaches from more than 130 CEOs on his podcast, and not one of them has ever said they wish they had started later.
How do I know when it’s the right time to sell my company?
The right time isn’t a date on the calendar. Glenn Gow tells CEOs it’s when the business can run without you for six months and the numbers don’t slip. If you can’t test that today, you aren’t ready to have the conversation with a buyer yet.
What does an exit strategy plan actually involve?
An exit strategy plan is what Mark Wald‘s team looks for when they prepare a business for sale: the specific operational gaps a buyer’s diligence team will find if you don’t find them first. Glenn Gow tells CEOs the plan is only real once someone besides the founder can run the business day to day.
What is EBITDA and why does it matter when I sell my company?
EBITDA stands for earnings before interest, taxes, depreciation, and amortization, and it’s the number most buyers price a company on. Patrick Brown backward-engineers his target EBITDA five years before his exit date, then works that number down to what his front-line team does every day. Glenn Gow tells CEOs who don’t know their current EBITDA that they aren’t ready to have an exit conversation with anyone.
Why can’t I stay the main point of contact for my biggest clients?
Because a buyer is pricing the risk of you leaving, not the strength of your relationships. Karl calls a business unsellable when the founder still owns every client relationship, since the buyer has no way to replace that person. Founders who hand off those relationships qualify for the kind of multi-bidder auction Brett builds toward. Founders who don’t are negotiating with one buyer who knows they’re the only option.
What is revenue concentration and why does it hurt my sale price?
Revenue concentration means too much of your revenue comes from one customer or one segment. Steven warns that a customer-heavy segment that feels efficient day to day becomes a red flag the moment you try to sell. This is exactly the kind of issue Mark Wald‘s team finds three months before a sale, when it is too late to fix without slowing the deal down.
How do buyers actually value my company?
Buyers value most companies on a multiple of cash flow, not on your growth story. Karl explains that agencies and service businesses get priced on net profit plus what the business currently pays the owner. That number has to hold up under diligence, or it isn’t real to a buyer.
How do I keep my team from panicking during an acquisition?
Communicate before the letter of intent is signed, not after. Jeff starts those conversations early because he has seen acquirers flatter a team through the courtship phase and then dictate new terms once the ink dries. Darren adds a second rule: don’t reverse the strategy you already sold to your board and investors, since he has watched that reversal alone tank team confidence after a deal closes. Glenn Gow calls the combination of early communication and strategic consistency the difference between a team that stays and one that quits mid-deal.
What is the difference between building a company to scale and building one to sell?
Scaling optimizes for growth. Selling optimizes for a system a buyer can run without you in it. Omar warns that chasing growth at any cost often produces a business a buyer only wants to strip for parts. Selling well requires a formula like Neema‘s, which treats stability and buyer fit as more valuable than growth speed.
Should I hire an independent exit strategy advisor?
If you cannot answer what your EBITDA needs to be in three years, yes. Neema has sold close to seven companies using a repeatable formula built around stability and buyer fit, the kind of formula an independent advisor helps a first-time seller build. Glenn Gow sees the CEOs who bring in outside help two to three years out consistently negotiate from a stronger position than those who wait.
What is a happy exit and why does it matter?
A happy exit is one where your team knows the sale is coming and benefits from it, whether through better pay under a larger parent company or a stake in the outcome. Omar describes what that benefit looks like in practice: “being part of the stock option pool where you’re, you know, making a couple of bucks.” Glenn Gow tells CEOs to put this in writing before the deal closes, not after.
What You Do Next
I’m Glenn Gow, and I have watched too many CEOs learn their business is unsellable in the same meeting where a buyer walks away. If you are still the only person your biggest clients call, you have time to fix it, but not in the six months before a sale. Book a call with me and I will help you map the two or three moves that make your company sellable without you standing in the middle of it.
