Exit Strategy Documentation

How to Setup Your Business for an Exit (My Playbook) I sold my company in 2019. The process takes time. Most founders start too late. They leave millions on the table. They scramble when buyers show up. Your exit starts the day you launch. Here's the exact playbook I used: Strategic Foundation (3-5 Years Out) Define your exit goals → Cash upfront vs earnout structure → Legacy preservation vs complete handoff → Target: PE, competitor, or employee buyout Build scalable systems → Document every process obsessively → Create autonomous teams → Metric: 80%+ runs without you Triple recurring revenue → Convert projects to subscriptions → Lock in multi-year contracts → Target: 70%+ recurring revenue Financial Optimization (2-3 Years Out) Audit financials ruthlessly → Hire forensic accountant → Clean up cap tables → EBITDA margins >20% Diversify revenue streams → No single client >15% → Kill concentration risk → Buyers hate dependency Document add-backs properly → Family salaries → Discretionary expenses → Boost EBITDA legitimately Operational Excellence (1-2 Years Out) Create your data room → SOPs for everything → Customer contracts organized → IP assignments secured Strengthen leadership team → Hire experienced COO/CFO → Tie equity to post-exit retention → Remove yourself from daily ops Lock key relationships → Supplier contracts secured → Client agreements transferable → Partner terms documented Exit Execution (6-12 Months Out) Engage advisors early → M&A attorney essential → Investment banker worth 5-10% → Tax strategist saves millions Run structured auction → Identify 50+ potential buyers → Create competitive tension → Never negotiate with one party Prep for due diligence → Financial audits complete → Customer churn analyzed → Tech stack documented Critical Valuation Levers: Recurring Revenue: 5-8X vs 1-3X for projects Gross Margins: <50% kills deals Customer Concentration: >30% = 20-40% discount Management Depth: No second-in-command? -30% Red Flags That Kill Deals: ❌ Inconsistent financials ❌ Founder dependency ❌ Pending lawsuits ❌ Declining revenue Your business is your biggest asset. Build it to sell from day one. Even if you never plan to. ♻️ Repost if this changes how you think about building businesses Follow Nathan Hirsch for more lessons from my exit P.S. Get 1 weekly newsletter with business advice from me here: https://lnkd.in/gvTsqqcf

Your exit starts the day you launch. Most founders build to run forever. Wrong. Build to sell from day one. Even if you never plan to. The mindset shift changes everything: Instead of: "How can I do this myself?" Think: "How would someone else run this?" Instead of: "I need to be involved in everything" Think: "What can only I do?" Instead of: "This is my baby" Think: "This is my investment" The Exit-Ready Framework: 1. Document Everything Your processes live in your head. That makes your business worthless. Create systems someone else could follow. Record your frameworks. Build playbooks. 2. Remove Yourself from Operations Stop being the bottleneck. If you're essential to daily operations, you don't own a business. You own a job. A very expensive, very stressful job. 3. Build Recurring Revenue One-time projects don't scale. Retainers do. Subscription models do. Community memberships do. Make revenue predictable, not dependent on your hustle. 4. Create Multiple Revenue Streams Never depend on one client for more than 30% of revenue. Never depend on one service for more than 50%. Diversification isn't just smart. It's sellable. The Exit Advantage: When you build to sell, you build better. → Systems over sweat → Assets over activities → Processes over personalities The result? A business that works without you. Revenue that flows without your presence. Value that exists beyond your involvement. Whether you sell or not. My reality: → Business runs without me → Systems handle everything → Revenue flows while I sleep → Team operates independently I built to exit. Even though I never plan to. Because exit-ready businesses are life-ready businesses. They give you choice. The choice to step back. The choice to step away. The choice to step into something new. Without losing everything you've built. Most founders are prisoners of their own success. They built a business that needs them to survive. So they can never leave. Build to exit, and you can choose to stay. Build to stay, and you're trapped forever. Your choice: Build a job that pays well. Or build an asset that works independently. One requires your presence. One rewards your absence. One traps you. One frees you. The exit mindset isn't about selling. It's about sovereignty. Over your time. Over your energy. Over your choices. Start building your exit today. Even if you never take it. Especially if you never take it. Because freedom isn't about having an exit. It's about having the option. And options are only valuable when they're real. Make yours real. Build to exit. From day one.

“If you get hit by a bus, could someone take over by Monday?” That’s what I once asked a founder halfway through exit prep. He laughed. Then paused. And said: “...probably not.” That’s the thing with SOPs (Standard Operating Procedures). Nobody wants to create them—until they realize what it costs to not have them. Here’s the nuance most people miss: You don’t need enterprise-level SOPs at $1M in revenue. But you do need something that shows how your business runs without you. Let’s break it down by stage: Early Stage ($500K–$1M ARR) ✅ Acceptable: Loom videos of you walking through tasks; checklists in Google Docs; one centralized folder of workflows 🚫 Not acceptable: “We just kind of do it the same way every time” or “I’ll show you later” Growth Stage ($1M–$5M ARR) ✅ Acceptable: Department-level SOPs in Notion or Trainual; documented onboarding for clients and new hires; defined roles and responsibilities 🚫 Not acceptable: Slack threads as “documentation”; onboarding by memory; one person holding all the knowledge in their head Scale Stage ($5M+ ARR) ✅ Acceptable: Clear process owners; version-controlled SOPs; KPI dashboards tied to workflows; integration between tools and SOP documentation 🚫 Not acceptable: Multiple versions of the same doc floating around; conflicting processes across departments; “our ops lead knows it all” Buyers aren’t expecting your company to look like McKinsey. But they are expecting clarity. Because clarity reduces risk. And risk is what drives price down. The more your business looks like it can run without you, the more valuable it becomes. → Want to see how transferable your operations really are? Download the Sellability Checklist: [Link to Sellability Checklist] #MandA #ExitStrategy #SOPs #BusinessValuation #FounderAdvice #SellSidePrep #ScalableSystems #OperationalExcellence

Are you a business owner thinking about your exit strategy? Creating a personal business owner exit plan is crucial for ensuring a smooth transition when the time comes to step away from your company. First, consider the value of your business. According to a report by BizBuySell, the average small business sells for about 2.5 times its annual earnings. Understanding this can help you set realistic expectations for your exit. Next, identify your goals. Are you looking to sell to a competitor, pass the business to a family member, or perhaps close the doors? Each option has different implications for your financial future and legacy. It’s also essential to prepare your business for sale. This means organizing financial records, streamlining operations, and addressing any outstanding liabilities. A well-prepared business can attract more buyers and potentially increase its sale price. Additionally, consider the timing of your exit. Market conditions can significantly impact your business's value. Researching trends in your industry can help you choose the right moment to sell. Lastly, consult with professionals. Engaging with financial advisors, business brokers, and legal experts can provide valuable insights and help you navigate the complexities of the exit process. Planning your exit is not just about leaving; it’s about ensuring your hard work pays off. If you found this information helpful, please like this post and share your thoughts or experiences in the comments. #BusinessExit #Entrepreneurship #ExitStrategy

Want to Sell Your Business? Make Sure These Are in Place First Selling a business isn’t just about finding a buyer. It’s about making your business attractive, transparent, and easy to transition. 👉 Before you sell, ensure these three critical operational must-haves are in order. 1️⃣ Solid Financial Records ↳ Detailed financial statements, including income statements, balance sheets, and cash flow projections. ↳ Accurate tax returns. ↳ Clear documentation of all financial transactions. 2️⃣ Documented Business Processes ↳ Standardized procedures for key operations, such as customer service, production, and inventory management. ↳ Written employee manuals outlining roles and responsibilities. ↳ Clear operational workflows that can be easily understood by a new owner. 3️⃣ Capable Management Team ↳ A strong leadership team with the expertise to maintain business operations during the transition phase. ↳ Key personnel well-versed in all aspects of the business, including customer relations and supplier management. ↳ Ability to effectively train new staff on existing procedures. 👉 Why These Matter? 1️⃣ Attracts Buyers:  Buyers feel more confident when financials, operations, and leadership are well-structured. 2️⃣ Smooth Transition:  Reduces disruptions and ensures business continuity. 3️⃣ Higher Valuation: Well-documented businesses typically sell at a higher price. 👉 Final Thoughts: A business that runs smoothly without its owner is far more valuable than one that depends on them. The more structured and prepared you are, the easier it is to sell at the right price - on the right terms. Preparation today leads to a profitable exit tomorrow. 📌 Follow me Kay Azmat for more insights! 💡

Business owners eyeing an exit next year, start planning now: 1️⃣ Clean up the books: Poor recordkeeping can kill deals. Engage a qualified accountant to review your financials. 2️⃣ Step back: Adopt and document systems to reduce owner dependency. 3️⃣ Lock in the team: Empower and incentivize key employees in the business. 4️⃣ Fix problems: Identify risk areas with pre-sale diligence and pursue solutions. Don’t hand a to-do list to the buyer. 5️⃣ Know your number: Make sure it’s grounded in reality. Get a sell-side valuation.