Business Exit Planning: Valuation, Deal Structure, and Timeline for Founders – Context Financial

How to Prepare a Business for Sale and Maximize Net Proceeds

If you are a founder considering an exit, you already know the headline number is not the full story. 

The win comes from preparation that raises your valuation multiple, a deal structure that protects your downside, and a clear target for post-sale life. 

“Most business owners base their exit on hope. Hope is not a strategy. Use numbers and set a target.” ~ Josh Ackerman, Certified Financial Planner™

In my conversations with investment banker Geoff Eliason of SDR Ventures, we dug into how owners can control the controllables and sell on their terms.

Business Valuation Multiples and EBITDA Explained

What really drives your multiple

Buyers pay for durable, transferable cash flow. They reward clean books, consistent EBITDA, customer diversification, and a management team that can run without you. 

Work toward stable year-over-year earnings and reduce single points of failure in customers, suppliers, and key people.

Industry comps vs actual buyer demand

Comps are a starting point. Real buyer demand, competitive tension, and your readiness package influence where you land within a range. 

A quality of earnings review, forecast with defensible growth drivers, and a prepared data room help move you from “average” to “premium.”

Why net proceeds beat headline price

Sellers fixate on the headline purchase price. I focus you on net proceeds at close. Taxes, working-capital pegs, escrow, seller notes, earnouts, and fees all affect what you actually take home. There are 33 million small businesses in the U.S., and every exit is unique; you need a plan built for your facts, not a neighbor’s deal.

Deal Structures: Cash at Close, Earnouts, and Rollover Equity

Deal terms change your outcome more than most sellers expect. Here is a quick reference you can use to frame options before you negotiate.

Deal Structure Cheat Sheet

Exit timeline and succession planning for family businesses

Many founders wait too long to decide between internal succession and a market sale. By the time they call an investment banker, the clock reads eleven, not eight. My guidance is simple.

• One year before market: Lock your target number, complete a readiness review, tighten financials, and run a quality of earnings.
  
  
• Six to twelve months to sell: Market the company, create buyer competition, negotiate terms, and sign an LOI.
  
  
• One to five years post-close: Many deals require you to stay involved for a transition or earnout. Know yourself if you are chronically unemployable, structure accordingly.
  
  

Family dynamics add complexity. If one child runs the business and the others do not, fairness and equality are different concepts. 

Consider trusts, governance, buy-sell mechanics, and liquidity paths for non-operating heirs. Start these conversations early so holidays stay friendly.

According to the Exit Planning Institute, up to 75% of owners regret selling within 12 months because they lacked a personal and financial plan for life after the deal. Align the exit with your values and your next chapter to avoid that outcome.

Ready for your next chapter

An exceptional exit is built, not found. Get your numbers right, improve what drives your multiple, and negotiate for net proceeds that match your life’s goals. Then design the personal side so you do not wake up after closing, wondering what to do next. 

If you want a thinking partner to map valuation, deal structure, and post-sale planning into a single path, contact us, and let’s get started.

Succession Planning for Business Owners: What I Learned From Two Hard Truths

Selling a business is not just a financial decision. It is a personal shift that can reshape your identity, your lifestyle, and your relationships. 

I spend a lot of time helping owners look past the purchase price and ask better questions before they make a move they cannot take back.

“Who are you going to be when you’re no longer the boss?” ~ Josh Ackerman, Certified Financial Planner™

Increase Business Value: Three Drivers Buyers Always Notice

The market will price your business based on what it can reliably produce for the next owner. 

That is why I coach clients to prepare early and focus on three drivers that consistently move the needle: financial performance, growth potential, and the Switzerland structure.

Financial Performance: Make it Predictable

Buyers pay for consistent earnings, not sporadic spikes. If your P&L looks choppy, your multiple suffers. Clean books, clear separation of personal and business expenses, and documented recurring revenue build confidence. 

According to the Exit Planning Institute, up to 80% of companies put on the market never sell, often due to weak financial readiness and owner dependency. Start fixing that now.

Growth Potential: Keep Your Foot on the Gas

You may feel like you are at mile 26 of a marathon. The buyer is at mile zero. They are paying for what happens next. Maintain momentum during negotiations. 

Keep winning work, documenting the pipeline, and empowering your team. 

Businesses that maintain or grow revenue during the sale process typically achieve higher valuations.

The Switzerland Structure: Reduce Single-Point Risk

Avoid overreliance on any one customer, supplier, or employee. 

My rule of thumb is that no customer should account for more than about 15% of revenue. Diversification signals resilience and makes the business easier to own and easier to buy.

Business Exit Planning: Two Stories Every Owner Should Hear

These conversations are not theoretical. Here are two experiences that shaped how I help owners think about transitions.

Story 1: “A Good Multiple” That Was Not Good Enough

Two partners received an offer. Their advisors focused on tax, legal, and industry multiples. In the parking garage afterward, I asked a different question: “Net of fees and taxes, do you have enough to maintain your current lifestyle?” They did not. 

Too many expenses ran through the business, so their “paycheck” was only a fraction of what they truly lived on. They paused the sale, implemented retirement savings, tightened books, and grew earnings.

Five years later, they sold successfully, on purpose rather than under pressure.

Story 2: Retirement Begins on a Tuesday

Another client celebrated a successful exit, completed the earnout, took the dream trip, then came home. 

On Tuesday morning, he asked his wife, “What are we doing today?” She said, “I have tennis, a meeting, lunch, then an event. I will see you at dinner.” He realized he had built his entire social world around work. If you do not plan your next identity, you risk feeling unmoored. 

This is one reason why research commonly cited by EPI notes that a majority of owners regret selling within 12 months. The math often works. The life plan does not, unless you design it.

Family Business Succession Planning: Fair is Not Always Equal

Transitions within a family introduce a different level of complexity. One common mistake is assuming equal shares are automatically fair. 

If one child runs the company full-time and the others do not, equal ownership can stall decisions and starve the operator of resources. Plan for cash flow needs across generations before you hand over the keys.

Table: Fair vs Equal in Family Business Transitions

What To Do Next

Start early. Ask better questions. Build a business that is valuable to a buyer and a life that is valuable to you. 

Clean up your financials, keep growth moving, reduce concentration risk, and design your post-transaction identity with the same rigor you used to build your company. 

The Small Business Administration notes that nearly half of business owners are 55 or older, which means timing and preparation are now strategic advantages.

When you are ready to explore business exit planning or succession planning for business owners in a way that fits both your numbers and your life, contact us to start the conversation today.

From Printers to People: How One Conversation Changed a Career

In a world where careers often unfold by default, I discovered my calling in financial planning for business owners during a simple lunch with my dad. 

That conversation sparked a career devoted to helping families, entrepreneurs, and business owners navigate money with purpose and clarity.

“I realized I needed to be doing something that had a more positive influence on the world than selling printers.” ~ Josh Ackerman, Certified Financial Planner™

The Spark That Started it All

My path into values-based financial planning began with dissatisfaction. 

I was working in corporate sales and realized I wanted to build something meaningful. My father, who had spent his career in financial services, reminded me that true fulfillment comes from helping others succeed.

By that Friday afternoon, I had closed one last deal and signed up for my first Certified Financial Planner course. What began as curiosity became a lifelong commitment to succession planning and long-term relationships with family-owned businesses.

Why Fit Matters More Than Sales

In financial services, chemistry and trust are everything. I’ve learned that if a client and I don’t connect, the best outcome is to part amicably.

“If you and I don’t connect, the worst thing I could do is convince you to work with me anyway.”

That belief has shaped how I approach every relationship at Context Financial. I focus on transparency, building trust, and ensuring my clients always feel understood.

Financial Planning is a Verb, Not a Product

For me, financial planning for entrepreneurs isn’t about selling a one-time plan. It’s about the ongoing planning process.

Building Trust Through Process

True planning evolves as life does. It requires ongoing communication and adaptation, especially during moments of change such as retirement, business succession, or family transitions.

Speaking Financial

I often say, “I speak financial.” My mission is to translate complex financial language into something everyone can understand.

According to the first-ever S&P Global FinLit Survey, only 57% of U.S. adults are financially literate, underscoring the need for this translation.

Two Mindsets: Scarcity and Abundance

I help clients identify their emotional relationship with money. 

By balancing fear and optimism, they learn to create both security and growth. This balance is one of the key ingredients in sustainable succession planning..

The Human Side of Numbers

I often tell people that financial planning for business owners is “the most liberal arts career ever created.” It blends math, psychology, and communication to help people align money with meaning.

As an educator at the University of Kentucky, I’ve had the privilege of helping shape the next generation of advisors through the Certified Financial Planner program. My teaching philosophy mirrors how I work with clients: relationships first, numbers second.

A recent CFP Board study found that 93% of advisors say their work provides personal fulfillment because it improves clients’ lives; a truth I embody daily.

Moving from Transaction to Transformation

What began as a career pivot from printers to people has grown into a mission to guide family business transitions and personal wealth planning with empathy, clarity, and trust.

Success, for me, isn’t measured in assets. It’s measured in confidence. My goal is simple: to help every client see the full picture of their financial future and prepare emotionally for what’s next.

If you’re a business owner thinking about your next chapter, start early. Begin by discussing your business exit strategy, goals, and life after the transition.

Ready to explore your next step? Contact us today.

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Handing down the family farm is about more than transferring assets—it’s about protecting a legacy, honoring hard work, and keeping the land in the family for generations to come.

But let’s be honest: planning that handoff can feel overwhelming.

Who takes over? How do you keep things fair without creating tension? What if no one in the family wants to run the farm? These are real questions that deserve thoughtful answers.

Here’s how to start making sense of it all.

It’s Not Just a Business—It’s Personal

When a family business is passed on, emotions always come into play. That’s especially true with a farm. The land holds memories. The work is personal. And for many families, the idea of “just selling it” feels like letting go of a piece of their identity.

So when it comes time to plan the transition, it’s not just about who gets what. It’s about how you make those decisions—and how you talk about them.

Fair Doesn’t Always Mean Equal

One of the most common challenges in family transitions? Trying to split everything equally among children who played very different roles in the business.

Estate planning expert Justin Schumacher puts it simply:

“Equal isn’t always fair.”

If one child has been working on the farm for years and another hasn’t been involved at all, should they really receive the same share? Giving each child exactly the same piece of the pie might seem like the easiest route, but it can cause long-term tension—or even risk the business itself.

Instead, focus on fairness:

• Who has been active in the business?

• Who wants to keep it going?

• Who would rather receive value in other ways?

Answering these questions—openly and honestly—helps set clearer expectations and avoid future conflict.

3 Simple Steps for a Smoother Transition

If you’re beginning to think about passing down the farm, here are three steps to help things go more smoothly:

1. Get Clear on Everyone’s Role
Take stock of who’s involved in the day-to-day work—and who isn’t. This helps shape your transition plan based on actual involvement, not assumptions.

2. Talk About It Early and Often
Don’t wait until a crisis forces the conversation. Sit down with your family, share your intentions, and invite feedback. When people feel heard, they’re more likely to understand—even if they don’t agree.

3. Bring in Outside Help
Sometimes, having an outside advisor in the room makes all the difference. They can offer objective guidance, keep things from getting too emotional, and help you think through scenarios you may not have considered.

What If No One in the Family Wants to Take Over?

It happens more often than you think. Farming is hard work, and not every child wants to continue it. If no one in the family is interested, you still have good options.

Local buyers are often eager to expand, especially those with operations already nearby. Working with professionals to value the farm and prepare for a sale can help you get a fair deal—and feel good about how the legacy moves forward.

Closing Thoughts: Protect the Legacy Without Creating Conflict

There’s no one-size-fits-all approach to handing down a family farm. Every family is different. Every business is different. But the goal is the same: to make decisions that honor your life’s work and protect relationships in the process.

With a little planning—and a lot of communication—you can set the stage for a smooth transition that respects both the business and the people behind it.

Want more insights like this? Check out the episode “Smart Strategies for Passing Down the Family Farm” with Justin Schuhmacher for deeper perspective and practical tips.

Thinking About Selling Your Business? Start Here.

Selling your business is a big deal.

You’ve put in the time, effort, and energy to build something from the ground up. And now you’re thinking about stepping away. That decision can bring a mix of excitement, nerves, and a lot of questions.

But here’s what most business owners don’t hear enough: selling isn’t just about the numbers. It’s about making sure your personal goals, financial life, and emotional readiness all line up.

If you’re starting to think about an exit, these are the four areas you don’t want to skip:

1. Get Clear on What You Really Want

Before you talk to buyers or even think about a number, take a step back and ask yourself:

“What do I want this next chapter of life to look like?”

Maybe you’re ready to retire completely. Maybe you want to stay involved in some way. Or maybe you’re looking for the time and space to start something new. Whatever it is, getting clear on your goals makes every other decision easier—from how to price the business to what kind of buyer you’re looking for.

We’ve seen too many owners get to the finish line and realize they weren’t ready to walk away. Being honest upfront helps you avoid regret later.

2. Clean Up the Financials

Buyers want clarity. They want to understand what they’re getting. That’s why organized, easy-to-read financials are such a big deal.

That includes standard income and expense reports—but also a clear breakdown of owner perks or discretionary spending.

When your books tell a clear story, buyers feel more confident. And that often means quicker deals with fewer surprises.

If it’s been a while since you cleaned things up, now’s the time to sit down with your CPA and go through everything.

3. Don’t Skip the Emotional Prep

This part often gets overlooked—but it matters just as much as the financial side.

Selling a business is emotional. You’ve likely tied part of your identity to the company. You’ve put years into it. So it’s completely normal to feel a bit uncertain—or even resistant—when the sale becomes real.

Take time to picture what life looks like after the sale. Who will you spend your time with? What will you do with your days? The clearer that picture gets, the more confident you’ll feel about making the leap.

And make sure you’ve got people in your corner—a trusted advisor, a CPA, or even a peer who’s been through it before. That support can make a big difference when things feel heavy.

4. Start Thinking Like a Buyer

What would you want to know if you were buying your business?

Buyers often come with questions about customer retention, recurring revenue, key employees, and future growth potential. The more proactive you can be in answering those questions—upfront—the smoother the process will go.

Show them what’s working, where there’s room to grow, and why your business is a smart investment.

Ready to Start the Conversation?

Selling your business isn’t just a transaction—it’s a life transition. And the better prepared you are on the front end, the more confident you’ll feel stepping into what comes next.

Start with your goals. Clean up the numbers. Be honest about how you’re feeling. And work with people who understand how to guide you through the process.

You’ve built something meaningful. When the time is right, you deserve to step away knowing you did it on your terms.

A slightly different format this week. I’ve been reading investment articles, and I thought I’d highlight the parts that interested me. Here is a striking chart from a great article I got from Blackrock. The important lesson here is that very few of our clients actually have the classic 60/40 portfolio. And this chart kind of explains why.  With interest rates down around zero for the next year or two, the yield on bonds isn’t going to be anything to brag about. Our Yield model, which would benefit greatly from 14% yield in Treasury bonds, is heavy in dividend paying stocks.

There is still a place for bonds in the portfolio. They are a useful “insurance policy” when the market gets flustered.

This is a blog I’ve wanted to have for a while now. The chart above shows average returns for various asset classes over a period of time. As you can see, the longer the time frame, the smaller the columns get. This means the range of returns narrows.

Here’s where it matters to us. Part of our job is helping clients make decisions about how to invest their money in order to reach their goals. An early conversation about investing will often include a discussion about “the market” and the potential direction of a particular part of that market. This conversation is heavily influenced by the left side of the chart. That’s where the financial press finds stories. If there is volatility in the returns, that means there may be a way to turn that into a story, “Stock A has unexpectedly gone down, or up. Stock B has done the opposite!” That’s where the drama comes from.

The Story

Charles and Lisa had been clients for years. We had an exemplary advisor/client relationship: open, clear, and regular communication, and mutual trust. We had long maintained a plan that everyone had confidence in when we suggested taking part in a new exercise.  

As trusted stewards of others’ money, we prioritize regularly participating in professional development opportunities. We had recently completed a refresher on the Financial Life Planning program. Our relationship with Charles and Lisa pre-dated this approach, so although we felt we knew them thoroughly, we knew that going back to basics could only strengthen their financial plan. They agreed.

Over the past six months, markets have marched higher almost uninterrupted since the lows back in March, just as the economy was thrown into the deepest recession since the Great Depression. Many investors find this disconnect between the equity market and the economy perplexing and are constantly asking us: is it justified?

The media often interchange the economy and the stock market: when the economy is booming we would expect stocks to behave similarly. This seems logical given U.S companies are based, operate and sell in the U.S. and economic growth impacts company revenue and profits. Likewise, when the economy is in a recession or recovering (as it is now) we would expect stock market movements to mirror (or at the very least be highly correlated) to that changing economic conditions. However, simply taking these assumptions at face value reflects substitution bias.

Substitution bias is the very natural and normal tendency to take mental shortcuts in trying to arrive at a complicated answer, which sometimes leaves us without a complete understanding of the problem itself. Luckily, by leveraging data, checking across sources and, most importantly, being open to a more complex discussion can help in getting around this bias.

While it is always hard to fully attribute where market gains and losses emanate from, we can point out that the economy and the stock market are not in fact 1 to 1 in the U.S. As shown, the composition of the equity market is heavily weighted to technology at 39%, which has done extremely well during this time, yet only 2% of total payroll jobs (Chart 1). Going deeper into the service sector, the industries most impacted by COVID-19 (including retail, hotels and tourism, transportation, entertainment, and restaurants) represent 20% of all payroll jobs and 19% of GDP, yet these same industries only represent about 7% of S&P 500 earnings.

In summary, while the stock market and the economy are linked, they have drastically different compositions, which can lead to the economy and markets appearing to be on different wavelengths. By yielding to substitution bias, investors may think the market rally is not justified, but a deep look under the surface suggests that in fact, it is.

Sector share of GDP, employment, S&P 500

The Story
Ginger has always been good at being thrifty. It’s who she is. Though she had significant sources of income and had saved well, it was challenging for her to feel confident that her savings were sufficient to live on for the rest of her life. This is true for a lot of people: it is difficult to interpret the implications on day-to-day life by looking at one lump sum of one’s worth.
Ginger came to us wanting to know that what she had meticulously saved throughout her life would simply be enough.