What to Consider Before Leaving Your Business

By: John Lawson

There’s a 100% certainty that you’re eventually leaving your business. Will it be on your terms?

After spending the last 40 years working with business owners and being one myself, I’ve seen some of the mistakes and successes that entrepreneurs make when selling their business.

With that in mind, here are five things every entrepreneur should consider while building and before selling their business.

The Lipstick on a Pig Trick

This does not work.

If your business is not up to snuff, any informed buyer will spot it.” Prettying up” the business so that a buyer submits a letter of intent and signs your non-disclosure to have a deeper look, will simply end up in disappointment and frustration at the time wasted as the buyer walks away.

If a company is not as good on the inside as it looks on the outside, you MAY get a reduced offer. Usually though, the buyer will walk away because they now wonder what else is not as advertised.

If you are going to all the work of being a successful entrepreneur, go that extra step and build it to create real long-term value.

50 Ways to Leave Your Lover

As Paul Simon alludes to, you can “leave your lover” in a lot of different ways. Let’s narrow it down to two categories.

  1. Planned – This is where you have decided you want to move on from your business. The successor will be family, a third party, or employees.

Often the cleanest, easiest and most profitable thing to do is selling to a third party. Family and employee purchases can lead to discounting to make it work, along with real and perceived fairness issues by siblings who are not involved in the business.

  1. Unplanned – Death, disability, unsolicited offers, and sudden changes in business landscape (i.e. COVID-19) are the most common catalysts for an unplanned exit.

A normal reaction to this is saying “well an unsolicited offer would be great!” The truth is, it is only a good situation if you are prepared. If you’re not prepared, you likely aren’t getting maximum value on an offer. You also may not be “ready” psychologically, financially, or both.

Death or disability aren’t scenarios that anyone wants, but good planning can mitigate some of the risks.

Sudden changes in business conditions can have a devastating effect, as we are currently seeing play out in this new COVID world. Business owners and the leadership teams must have processes in place to measure, assess, and respond to changes in their environment.

Build to Sell

Even if you never have any intention of selling your business, it is good business to always be in position to sell for top dollar. It means you will be more profitable, enjoy working more, and probably have more time for yourself outside of the business. It also means your family, employees, and business’s future is well taken care of.

“It is good business to always be in position to sell for top dollar.”

Let’s start with the basics of building to sell. This only works if you are brutally honest and constructive on assessing the strengths and weaknesses of your business. You may know your business and industry better than anyone else, but can you honestly step back and view it constructively? If not, get help.

Your goal is to make yourself irrelevant. A buyer wants a business that can be purchased and run as an investment. A buyer wants a functioning team in place, so the clientele doesn’t notice a change and the business does not skip a beat.

Work ON your business, not IN your business. This is age old advice, but owners get sucked into the minutia all the time.

I often hear: “We can’t afford not to work in the business.” Well, you can’t afford to not work on the business either. Carve out the time and get the right help to lay the plans to your irrelevance. What so many business owners find as they make this transition is they are re-energized by the planning and newfound growth opportunities.

Figure Out Your Goals

The goal of making yourself irrelevant often leads to an incredible business model.

Now turn your thoughts to personal goals. What do you and your family want to do?

These goals then lead to other very important questions:  How much money do you need, and how are you going to fund this? How do you do this in the most tax effective manner? How do you pass this on to the next generation? If you have a passion for giving, what is the best way to do that?

Let’s tie this back to the unsolicited offer scenario. If you don’t know your personal or family goals, then you don’t know how much you need, which means you have no idea if an unsolicited offer is good for you or not.

I’ll throw out another kink that many don’t realize until it is too late. The selling price and what you get as after-tax dollars can be two very different numbers. You must understand your situation and plan for the most efficient way for you to structure your affairs. It is not what you get, it is what you keep that’s important.

Setting this up correctly can mean hundreds of thousands of dollars or more in savings, so take the time to figure this out with your team of professionals.

Find your Dream Team

The very best investment you can make is in building a great advisory team to work with. Most business owners use an accountant and lawyer only when needed. The shift in thinking needs to be forward-looking, not backwards. Move away from dealing with situations as individual transactions and towards planning and viewing from a holistic approach with your advisors as a team.

“The very best investment you can make is in building a great advisory team.”

Work with a wealth management team that will lead with planning first at all levels; financial, estate, tax, risk, philanthropic, investment, and business planning so that they all tie together and are done in consultation with your current legal and accounting professionals. For some, the additional services a family office can provide make sense too. Any other required skill sets can be brought in as required by your core team.

Planning and good advice is crucial to you and your family to make informed decisions. Good planning takes time, so start now.

If you have any questions, email us at or visit our website at

This material is provided for general information and is subject to change without notice. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please make sure to see a professional advisor for individual financial advice based on your personal circumstances.

John Lawson, CFP®, CIM, FEA is a founding partner of Sana Family Office and a Senior Wealth Advisor with Assante Wealth Management. He serves affluent families and business owners in the Lower Mainland with offices in Surrey and Abbotsford. You can get in touch with John by emailing