If you’re a business owner considering a sale in the next few years, you’re not alone. Over 60% of the 15 million privately held businesses in the U.S. are owned by Baby Boomers, and more than 75% of them expect to sell in the next decade. That coming wave of owners heading for the exits—the “Silver Tsunami”—is going to reshape the market in ways that reward the prepared and punish those that are not.
Unfortunately, preparation is the exception, not the rule. According to the Exit Planning Institute’s 2023 National Report, 75% of business owners who sell their company express profound regret within 12 months of the sale. Why? Because the business wasn’t worth what they thought, the sales process was mishandled, or they weren’t personally ready for the transition.
The Future Market Will Be Tougher
As more businesses flood the market, buyers will become choosier. Only the best-run, lowest-risk companies will command premium valuations. That means if you want to secure a high-value exit—one that rewards your years of effort—you’ll need to start preparing now. In fact, most successful exits begin 1–3 years before the business goes to market.
Three Essential Questions to Answer Early
Before you think about selling, make sure you can answer these three questions:
- Am I personally ready for the next chapter?
Many owners underestimate the emotional toll of stepping away. It’s critical to start planning your post-sale life now—whether that means new ventures, volunteer work, hobbies, or spending time with family. - How much do I need to net from a sale?
Remember, this is net—after taxes, professional fees, employee bonuses, and debt payoffs. Start with your desired retirement income, then work backward to understand what the sale of your business needs to deliver. - What is my business worth today?
Business value is about more than EBITDA. Risk, growth potential, customer concentration, and other factors all affect what buyers are willing to pay. Knowing where you stand helps identify the gap between today’s value and your target.
Eight Drivers of Enterprise Value
One of the most powerful tools available to business owners is the Value Builder Score, a system that evaluates your business on eight statistically proven drivers of enterprise value. These include:
- Financial performance
- Growth potential
- The degree to which the business can run without you (Hub & Spoke risk)
- Recurring revenue
- Customer diversification
- Competitive differentiation (Monopoly Control)
- Scalability
- Company culture and team strength
After analyzing over 80,000 businesses, data shows that companies with a Value Builder Score of 90+ receive offers that are 2x higher—on average—than companies scoring in the 50s and 60s. That difference can mean millions in added value for your exit.
This table summarizes the correlation between the Value Builder Score and EBITDA multiple. The results are crystal clear….these 8 drivers of value will either create or kill value in your business.
Click here to get the Value Builder Score for your company
Positioning for the Likely Buyer Profile
Strategic and financial buyers look for different things, but both want clean, low-risk opportunities. To get there:
- Professionalize financial reporting
- Diversify your customer base
- Reduce dependency on the owner
- Protect intellectual property
- Eliminate outdated systems
Competition Drives Value
Finally, when it’s time to sell, don’t fall into the trap of negotiating with just one buyer. A competitive process—one that includes multiple, qualified buyers—leads to stronger offers, better deal terms, and fewer surprises during diligence. Create a structured, auction-style process that limits exclusivity and shortens timelines. This often involves a good bit more work and effort than listing the business on various buy/sell platforms, but it is worth it.
Finally, assemble your team of advisors early. This team should include a business broker/investment banker, accountant, a transaction attorney, and wealth advisor. All of these issues are somewhat inter-related and you will want everyone on the same page before you start the sales price.
Want to Learn More?
If you’re a business owner thinking about an exit in the next 1–5 years, don’t miss our upcoming webinar:
Your Business / Your Payday: The Road to a High-Value Exit
Thursday April 24 at 2PM EST.
We’ll dig deeper into what drives business value, how to avoid post-sale regret, and what you can do now to ensure the future you want.