TradeExit Guide

Exit planning: a 3-5 year playbook

Exit planning is making your business sellable at a good price, on your timeline, before a health event, a partner dispute or a buyer's letter forces the issue. The owners who get the top of their trade's range usually started fixing owner dependence and documentation years before they sold.

Updated 2026-09-23 · 2 sources · By the TradeExit Guide team

Timeline

  1. 3-5 years out

    Get a baseline value (calculator); clean up books; update the buy-sell agreement; start building a management layer.

  2. 2-3 years out

    Grow recurring revenue (maintenance agreements, contracts, hygiene); reduce customer concentration; get licenses held by more than one person.

  3. 12-24 months out

    Two clean years of financials; decide the route (family, employees, ESOP, outside buyer); model taxes with the after-tax calculator.

  4. 6-12 months out

    Assemble documents; choose advisers (broker vs DIY); go to market. Main Street deals take 6-10 months to close (IBBA Q2 2026).

Succession routes

RoutePriceSpeed / certaintyWatch out for
FamilyOften below marketDepends on readinessGift/estate tax planning, fairness among heirs
Key employeesMarket-ish, often seller-financedModerateYour note is their risk
ESOPFair market value (appraised)Slower, more complexCost and ongoing administration
Outside buyer / PEHighest headline at scaleMarket-dependentEarn-outs, rollover, your employment term

What moves the multiple most

Across trades, the drivers buyers cite are the same: recurring revenue, low owner dependence, no customer over ~15-20% of sales, clean records, and people who stay. See your trade’s specific drivers on its valuation page. In dentistry, for example, the share of dentists affiliated with DSOs rose to 16% in 2024 (ADA HPI) - buyers exist, but they pay for practices that do not depend on one doctor.

Get the 3-year exit-planning checklist

A printable year-by-year checklist, from 3-5 years out to closing.

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Printable checklist
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Frequently asked questions

What is the silver tsunami?

The wave of baby-boomer business owners reaching retirement age and looking to sell or pass on their businesses.

How early should I start exit planning?

Three to five years before you want to sell gives time to fix the issues that lower your multiple.

What increases the value of my business most?

Recurring revenue and reducing your own role. Buyers pay most for a business that runs without its owner.

Sources

  1. IBBA / M&A Source / Pepperdine Market Pulse, Q2 2026 highlights (accessed 2026-09-23)
  2. ADA Health Policy Institute - Dental practice research (accessed 2026-09-23)
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