Built to Thrive (and Sell): Part 1 - Your Vision

What Does a Successful Exit Look Like for You?

This is the first in a series designed to guide business owners through the complex yet crucial process of preparing their business for sale. This Built to Thrive (and Sell) series draws on insights from various experts and reports and will provide a comprehensive roadmap from defining your personal goals to navigating the sales process and planning your life after the business transitions.

Selling a business is arguably one of the most significant financial and personal decisions a business owner will make in their lifetime. For many, especially those who have dedicated years, perhaps even decades, to building something from the ground up, their business is deeply intertwined with their identity, purpose, and lifestyle. It's more than just an asset; it's a culmination of hard work, passion, and often, a family legacy. However, actively considering how this journey will end is often delayed until it's too late. Business owners are often preoccupied with day-to-day operations, employees, and their communities, placing their own needs and future planning on the back burner.

The urgency for proactive exit planning is underscored by current market dynamics. Many businesses across the United States are owned by baby boomers. The "Silver Tsunami," referring to the large percentage of these owners looking to sell in the coming years, presents both challenges and opportunities. While 70% of business owners surveyed in one report wanted to sell in the next 10 years, only a fraction of businesses that go to market actually sell, leaving a large percentage of owners without the opportunity to realize their wealth. Market studies and reports indicate that 70% of business sales transactions eventually fail. Even for the minority who successfully sell, a significant percentage – nearly 75% according to the Exit Planning Institute (EPI) – profoundly regret selling their company just a year after the transition.

This regret often stems from neglecting crucial aspects of the transition beyond just the financial transaction. Owners may feel disconnected post-sale due to a loss of identity and purpose. They might realize too late that they could have received more money or preserved their legacy better by choosing a different transition partner. The rapid changes often implemented by external buyers, such as private equity firms, can lead to high employee turnover and undesirable cultural shifts, conflicting with the seller's desire to preserve their business's soul.

To successfully transition, a business owner must address three core elements:

• maximizing transferable business value

• preparing financially for a lifestyle without the income from the business, and

• planning personally for what they will do in their next act after exiting the business.

Failing to plan for transition can lead to personal regrets, realizing "after the fact that they left money on table". Many owners are miserable post-transition because they lacked personal purpose and allowed their business to define them. Some even return to the workforce because they lacked a personal financial strategy tied to their company's value, resulting in a "Wealth Gap" upon exit.

This highlights why the first step in the "Built to Sell" series is defining your personal and financial goals. Before engaging with advisors or potential buyers, it is critical to gain clarity on what a successful exit truly means for you, your family, and your legacy. Without this foundational clarity, you risk pursuing an outcome defined by others, rather than one that genuinely aligns with your deepest values and aspirations.

Selling your business is fundamentally a life transition, not merely a financial one. Your business is likely deeply intertwined with your identity and purpose. This is why beginning exit planning by defining success on your own terms is paramount. This initial step provides the "north star" that will guide every subsequent decision, from determining valuation expectations to choosing the right type of buyer and deciding on your level of involvement after the sale.

The Colorado State of Owner Readiness Report revealed a significant gap between recognizing the importance of a transition strategy and taking action to prepare. For example, 68% of business owners surveyed indicated they had spent minimal time and attention on their exit. Nearly half (48%) had no written personal financial plan. A striking 65% had no formal or written transition plans, and 23% had not even considered a plan. Furthermore, 78% indicated they did not have an exit-focused team of advisors. This data underscores the widespread lack of preparedness among business owners.

A significant reason for this lack of preparedness is that many business owners do not understand that exit strategy is business strategy. They do things daily within their companies that will eventually impact their exit, yet nearly 80% of owners surveyed had no formal value enhancement strategy or projects active, and 35% stated they had no understanding of value. The business itself is only one of three critical elements for creating a significant company and a fulfilling exit.

Personal readiness is a particular struggle for many business owners. Envisioning passions and goals for life outside the company in the future can be difficult. In one survey, when asked about their personal readiness for the major transition of their company, 56% of the sample group rated themselves below average, and an alarming 25% admitted they were not ready at all. Nearly 90% of surveyed business owners in Colorado indicated they had no formal written plans for what they wanted to do next, and 27% had not thought at all about what they wanted to do after selling their company. This is particularly concerning given that 52% of owners indicated they wanted to transition their company within the next 5 years. Finding personal purpose, vision, and goals is critical to success in the next phase of a business owner's life, especially considering the high rate of regret among those who sell.

The concept of "The Three Legs of the Stool" emphasizes the necessity of integrating personal and financial goals and plans with business planning. This holistic and focused approach prepares the business owner for all possible events while potentially creating rapid growth and wealth. Unfortunately, 69% of business owners surveyed stated they need the income from their business to survive personally, highlighting the critical need for integrated financial planning that addresses the "Wealth Gap" upon exit.

Planning for your "next act" is crucial for a fulfilling exit. What do you plan to do once you exit your business? Options can include becoming a consultant (30%), investing in another business or serving on a board (11%), retiring (41%), buying another business (35%), or engaging in philanthropy (24%). Alarmingly, 18% of surveyed owners reported having no plans at all. Personal readiness also involves family, and in the Colorado sample group, 49% of owners stated they had not told their family about their transition plans or had no plans to.

The principles from "What's Within You," co-authored by American Dream Home Services (ADHS) co-founder Dave Shurna, offer valuable guidance for this crucial first step. These principles, including Vision and Reach, are central to the ADHS approach and can help business owners define their future and push beyond perceived limitations. Identifying your personal Vision means pinpointing and pursuing what matters most to you. ADHS's approach begins with helping owners define a compelling vision for themselves and their business. Think about where you want your business to go, even beyond the sale. Your vision informs the story you tell and demonstrates you've considered the long-term future. As you craft your vision for retirement, reflect on what brings you joy, your core values, and what activities energize you. Set new goals that inspire you to learn, grow, and contribute. The principle of Reach involves pushing beyond your comfort zone, embracing new challenges, and adapting to change. Selling a business is a journey filled with challenges and unknowns, and buyers want to see that you can handle these unexpected situations.

Clarifying your personal, financial, and philosophical goals forms the foundation of your exit strategy. When you have this clarity, you can filter buyer offers more effectively, avoid post-sale regret, and maximize the right kind of value that aligns with your objectives.

Furthermore, it is essential to remember that life is unpredictable, and unexpected events could force a transition sooner than planned. Half of all business exits are forced, not occurring on the owner's terms or timeline, often resulting from the "5Ds": death, disability, distress, disagreement, and divorce. While 50% of Colorado owners surveyed had plans for contingencies, 21% had informal plans that were not documented or shared. This underscores the urgent imperative to prepare for a business transition.

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Detailed Action Steps

Based on the sources, here are detailed action steps business owners should take for this crucial first step of defining their personal and financial goals for exit:

1. Dedicate Time for Reflection and Visioning: Set aside specific, uninterrupted time to honestly reflect on what you want your life to look like after exiting the business. This is not a task to rush. Consider what activities bring you joy, your core values, and what truly energizes you beyond your current role as a business owner. As suggested by the "What's Within You" principles, work towards defining your "Vision Statement" for this next chapter. Imagine looking back five years after the sale and feeling immense joy and fulfillment – describe why that is. See the details below for steps to craft your personal Vision statement.

2. Explore Potential Next Steps and Purpose: Begin contemplating specific activities or pursuits that could provide purpose and direction in retirement. Referencing the Colorado survey, consider options like consulting, investing, philanthropy, retirement, or starting a new venture. For many owners, personal readiness is a struggle, and understanding their passions outside the company is difficult. Actively explore these possibilities now.

3. Define Your Personal Financial Needs (The "Freedom Number"): Determine the financial resources required to support your desired lifestyle after you exit the business. This is your personal "freedom number". Understanding this number is crucial for assessing whether the potential proceeds from a sale will be sufficient and for identifying any "Wealth Gap" that needs to be addressed through business value enhancement.

4. Engage with a Financial Advisor: Work with a qualified financial advisor or wealth manager to help you define your personal financial goals and assess your current financial situation relative to your post-exit needs. A formal, written personal financial plan is essential. Note that simply having a plan is not enough; it should be prepared or reviewed by a financial advisor. This professional can help integrate your business transition plans with your overall personal wealth strategy.

5. Develop or Update Personal Planning Documents: Ensure you have essential personal planning documents in place and up-to-date. This includes a written and updated Will, a written Estate Plan, and written personal goals and objectives. Estate planning is critical for protecting sale proceeds, understanding tax-efficient deal structures, and considering gifting strategies.

6. Discuss Transition Plans with Your Family: If applicable, have transparent conversations with your family about your intentions and plans for transitioning the business. This is particularly important in family-owned businesses. Recall that 49% of owners surveyed in Colorado had not told their family about their plans. Involving your family can help align expectations and facilitate a smoother transition.

7. Begin Assembling Your Advisory Team: While the next article will delve deeper into this, start identifying core advisors you will need, such as a CPA, attorney, and financial advisor. These represent the "Three Legs of the Stool" – business, financial, and personal. It is beneficial if at least one of these advisors is a Certified Exit Planning Advisor (CEPA), trained to help you create strategies for value growth and wealth unlocking. Don't wait until the last minute to build your team.

8. Acknowledge and Plan for Contingencies: Understand that approximately 50% of exits are forced and may not happen on your desired timeline due to unexpected events like the "5Ds" (death, disability, distress, disagreement, and divorce). Having a plan for contingencies, even an informal one, is a step towards readiness. While 50% of owners had contingency plans, only 30% had them in writing. Documenting these plans is crucial.

Your First Step: What’s Your Vision?

Crafting a Vision statement is a foundational step in understanding your purpose and guiding your actions, whether for personal life, a business, or even retirement. Vision is described as a compass, a calling, and a guiding light that is connected to your core values. It's about allowing your values to reveal a foundational and sustainable purpose.

Here are steps and considerations for crafting a Vision statement:

• Understand What Vision Is (and Is Not): Your Vision is a purpose that inspires you to give your best back to the world. It states who you want to be and why that matters. Vision is about allowing your core values to reveal a sustainable purpose for your life. It's an enduring statement that embodies what you value most. When defining your Vision, it's a qualitative endeavor, not a quantitative one, focused on values and beliefs, not a list of goals or desired achievements. Vision is not about seeing the future, as life is unpredictable, and it is not unchanging; it allows for change and growth.

• Reflect and Reassess Take time to contemplate what you truly value and enjoy: This is a self-realization process of understanding what matters most to you in your life and what fuels your inner light. Journaling or engaging in discussions with family and friends can help clarify your aspirations.

• Clarify Your Values: Before diving into crafting the statement, identify and write down a list of your values that serve as guidelines for your day-to-day decision making. Values are your heart’s deepest desires for how you want to behave or act on an ongoing basis, not about what you want to get or achieve. Reflecting on your company's Core Values is also crucial, ensuring they align with your current business and future goals.

• Draft Your Vision Statement: Combine your values and passions into an inspiring statement about who you want to be. The best Vision holds potential energy, with implicit action. When you read it, it should ignite a fire inside you. Consider the context of your Vision, whether it's for work, family, relationships, health, personal performance, or all of the above. It's okay to fail or feel stuck initially; the process is not always clear.

• Incorporate the Principle of Elevate: Consider how your Vision can be about more than just you. True happiness is found in helping others. Ask yourself: "How might this be about others more than it's about me?" and "Where might I Elevate my team, my family, my community, or the world around me as part of my journey?". Adapt your personal Vision to incorporate this principle.

• Visualize Your Journey (Create a Roadmap): Draw a Roadmap with "You Are Here" at the top and your Vision at the bottom. Draw a road connecting them and add a series of goals that will lead you toward achieving that Vision. These are activities, often referred to as Reach goals, that build upon each other and move you closer to your defined purpose. You can also add relevant visual cues or words related to other Life Elements like Pioneer, Rope Team, Alchemy, and Summits to your roadmap.

• Seek Feedback from Your Rope Team: Share your revised Vision with someone close to you, such as a close friend or family member, who can be part of your support system or Rope Team. Sharing your Vision helps move it from your head into reality and provides an outside perspective. Ask them if they get a sense of both the "me and the we" in your Vision, and invite their questions and ideas.

• Refine Your Vision: Make any final changes to your Vision Statement and Roadmap after reflection and discussion. Remember, Vision is not set in stone, and you can return to and adapt it as you go through other life experiences or Life Elements like Pioneer, Rope Team, Alchemy, and Summits.

Key Questions to Ask Yourself

✅ What are my personal goals for life after the business?

• Do I want to retire completely or stay involved part-time?

• Am I ready emotionally to step away?

• What does “freedom” look like—travel, philanthropy, family time, or launching something new?

✅ What does financial security mean to me?

• What is the minimum I need to walk away with to live comfortably?

• What would allow me to support loved ones or causes I care about?

• Have I calculated my “number” with my wealth advisor?

✅ What legacy do I want to leave behind?

• Is preserving my company culture or keeping employees intact a priority?

• Do I care if the business keeps my name or mission?

• Would I feel better selling to a private equity firm, strategic buyer, or employee ownership model?

By following these steps, you can craft a Vision statement that serves as your compass, guiding you through challenges and toward a fulfilling future.

Defining your personal and financial goals is not just an administrative task; it is the introspective work that lays the groundwork for a successful and fulfilling transition. By understanding what you truly want for yourself and your family, you are better equipped to make strategic decisions about your business exit that align with your values and maximize the right kind of value.

This initial step, while challenging due to its personal nature and the difficulty many owners face in envisioning a future without their business, is arguably the most important. It empowers you to take control of your future, rather than being subject to market forces or unplanned events.

Next in the Built To Thrive (and Sell) Series

In the next article of this series, we will shift from personal clarity to professional strategy, focusing on assembling the right advisory team that will help you navigate the complexities of preparing for and executing your business exit.

The right advisors will help you maximize value, avoid costly missteps, and navigate each phase of the sale with confidence. From attorneys to wealth planners to your lead exit advisor, we’ll walk you through who you need, when to call them, and why timing is everything.

Are you considering your business exit and wondering where to start with defining your personal and financial goals? Don't wait until it's too late. Contact Will Petter, co-Founder of American Dream Home Services and B2B exit advisor at B2B CFO for a complimentary consultation and let us help you explore your options and start charting your course toward a successful and fulfilling transition.

Wondering what's in the entire series? We've currently mapped out 14 steps including tax and estate planning, what buyers want, cleaning up financials, strengthening the management team, de-risking the business, cleaning operations, protecting relationships, preserving culture, running a sales process, when to say what and planning your next chapter.

Check out the Podcast Episode about this topic!