At age 10, I was running my first business. At 18, I scaled my painting company 6X in a single year. At 25, I sold my first company and learned the most expensive lesson of my entrepreneurial life.
I had built something valuable. I had customers, systems, and revenue. What I didn’t have was an exit strategy.
The sale happened, but it happened on someone else’s terms. I left money on the table. I left opportunity on the table. Most painfully, I left lessons unlearned that would cost me years of trial and error.
Here’s what nobody tells you: your exit strategy isn’t something you create when you’re ready to leave. It’s something you design from day one.
Today, having deployed over $15 million in alternative investments and guided countless entrepreneurs through business transitions, I’ve learned that the most successful exits aren’t accidents. They’re architectures.
“The entrepreneurs who build lasting wealth don’t just plan their entrance—they engineer their exit before the first brick is laid.”
Why Most Exit Strategies Fail
I’ve watched brilliant entrepreneurs build incredible businesses, only to stumble when it came time to exit. The pattern is always the same.
They treat the exit as an afterthought. A future problem for future them.
But here’s the reality: your exit strategy influences every decision you make today. It determines who you hire, how you structure ownership, which investments you pursue, and ultimately, whether you can actually transition on your terms.
When I completed 75 Hard twice—once in honor of my late brother—I learned something profound about discipline: the plan determines the outcome more than the effort. You can work incredibly hard in the wrong direction and still end up lost.
The same principle applies to exits.
Most exit strategies fail because they’re built backward. People decide they want to exit, then try to make their business fit the exit. But by then, the architecture is already built. The foundation is already poured.
Changing course at that stage isn’t impossible, but it’s exponentially harder than building correctly from the beginning.
The 7 Types of Exits Every Entrepreneur Must Understand
Before we talk strategy, we need to talk taxonomy. Not all exits are created equal, and the right exit for you depends entirely on your values, vision, and definition of success.
Exit Type #1: Strategic Sale
This is when a larger company acquires yours because you solve a problem for them or enhance their market position. Strategic buyers typically pay premiums because they’re buying future value, not just current earnings.
I’ve seen strategic sales deliver 8-12X EBITDA multiples when the fit is right. But here’s the catch: strategic buyers are looking for specific things. If you haven’t built your business with strategic value in mind, you’ll never command those multiples.
Questions to ask yourself: What makes your business strategically valuable? What problem do you solve that larger players can’t easily replicate? How have you protected that value through systems, processes, and intellectual property?
Exit Type #2: Financial Sale (Private Equity)
Private equity firms buy businesses based on cash flow and growth potential. They’re looking at numbers, scalability, and whether they can improve margins through operational excellence or add-on acquisitions.
PE exits typically range from 4-7X EBITDA for small to mid-market businesses. The advantage is speed and certainty. The disadvantage is that PE buyers are ruthlessly analytical. If your financials aren’t clean, if your customer concentration is too high, if your margins are thin, they’ll walk away or hammer your valuation.
Through Sandstone Group, I’ve structured dozens of these transactions. The businesses that command premium multiples have one thing in common: they’ve been running like they’re already owned by a PE firm.
Exit Type #3: Management Buyout
Your team buys the business. This is the exit strategy that prioritizes legacy over maximum price.
I respect this approach enormously. It honors the people who built the business alongside you. It preserves culture. It maintains relationships.
But let’s be realistic: your management team probably doesn’t have the capital to write you a check for fair market value. You’ll need to structure seller financing, which means you’re still tied to the business for years.
This works when preserving the mission matters more than maximizing the check. It works when you trust your team implicitly. It doesn’t work when you need liquidity now or when your team lacks the strategic vision to take things to the next level.
Exit Type #4: Passing to Family
The family succession is the most emotionally complex exit in business. I watched my father navigate family dynamics in estate planning throughout my childhood. The technical aspects are challenging enough. The emotional dynamics can destroy families.
Here’s what makes this exit work: treating it like a business transaction, not a gift. Your children or family members need to earn their role. They need to prove they can lead. They need skin in the game.
When succession is treated as an entitlement, businesses die within a generation. When it’s treated as a transfer of stewardship, businesses thrive for decades.
Exit Type #5: Lifestyle Business Transition
Not every business needs to sell for eight figures. Sometimes the best exit is restructuring your role from operator to owner, maintaining cash flow while removing yourself from day-to-day operations.
This is my personal favorite for certain types of businesses. You get to keep the asset. You keep the cash flow. You remove the burden of daily operations.
I’ve built multiple businesses this way. The key is systematization. You need to build a business that runs without you before you can step back from it.
This exit works when cash flow matters more than a lump sum. It works when you love the business but need freedom. It doesn’t work when the business is fundamentally dependent on you personally or when the industry is declining.
Exit Type #6: Liquidation
Sometimes the best exit is shutting things down and selling the assets. This isn’t failure—it’s strategy.
I’ve liquidated businesses. I’ve walked away from ventures that weren’t aligned with my vision. Each time, it freed up capital, energy, and attention for better opportunities.
The entrepreneurs who struggle most are the ones who hold on too long. They confuse persistence with wisdom. They let sunk costs dictate future decisions.
Liquidation is an exit strategy. Sometimes it’s the right one.
Exit Type #7: Public Offering (IPO)
Taking a company public is the exit most entrepreneurs dream about and the one least likely to happen. IPOs are expensive, time-consuming, and require a level of scale most businesses never reach.
But for the right business at the right time with the right team, an IPO can be transformational. You maintain control. You create liquidity for yourself and your team. You raise capital for growth.
The downside? You’re now managing a public company with quarterly earnings pressure, regulatory compliance, and shareholder demands. Your life gets more complex, not less.
The Truth About Exits: The best exit strategy is the one that aligns with your ideal day, supports your values, and moves you toward joy not just the one that delivers the biggest check.
The 5 Pillars of a Bulletproof Exit Strategy
Every successful exit I’ve orchestrated or witnessed shared five common elements. These aren’t optional. They’re foundational.
Pillar #1: Clean Financials
Your financial statements need to tell a clear, compelling story. Not a creative story. Not an optimistic story. A clear story.
Buyers whether strategic, financial, or individual, will scrutinize every line item. They’ll adjust EBITDA for owner expenses, one-time costs, and anything that won’t transfer with the business.
I’ve seen deals crater because the owner ran personal expenses through the business and couldn’t separate personal from business cash flow. I’ve seen valuations get hammered because revenue was lumpy and unexplainable.
As a CPA, I can’t stress this enough: clean financials aren’t just about compliance. They’re about credibility. They’re about commanding the valuation you deserve.
Start now. Get a competent bookkeeper. Use accrual accounting. Reconcile monthly. Prepare audited or reviewed statements at least two years before you plan to exit.
Pillar #2: Transferable Value
If the business can’t run without you, you don’t have a business. You have a job with extra steps.
Transferable value means systems, processes, and people that deliver results independent of your daily involvement. It means documented procedures. It means trained teams. It means a brand that exists beyond your personal reputation.
When I scaled my painting company 6X at age 18, I thought I was building something valuable. I was just building a bigger job for myself. The business scaled, but it couldn’t transfer. When I eventually exited, I learned that lesson the expensive way.
The fix isn’t complicated, but it requires discipline. Document everything. Train deliberately. Build redundancy. Test your absence by actually being absent.
Take a two-week vacation with zero contact. If the business survives, you’re on the right track. If it doesn’t, you have work to do.
Pillar #3: Strategic Timing
Markets cycle. Industries evolve. Buyer appetite shifts.
The entrepreneurs who maximize exit value understand timing. They track industry multiples. They watch consolidation trends. They position their exit when their industry is hot, not when they’re burned out.
I can’t tell you how many times I’ve seen business owners decide to sell because they’re tired, their marriage is struggling, or they’ve lost passion for the work. They enter the market as desperate sellers, and buyers smell it.
Strategic timing means exiting from strength, not weakness. It means positioning your sale when you’re hitting record numbers, when industry tailwinds are strong, when buyer competition is intense.
This requires patience. It requires building the business to be valuable, then waiting for the market to recognize that value.
Pillar #4: Multiple Exit Options
You should never have just one exit path. You need options.
Build your business so it’s attractive to strategic buyers AND financial buyers. Position yourself so a management buyout is viable if external sales fall through. Structure things so you could operate semi-absentee if you wanted to keep it.
Optionality is power in negotiations. When you have multiple paths to exit, you’re negotiating from strength. When you have only one option, you’re negotiating from desperation.
This is why I emphasize diversification not just in investments, but in strategic planning. Don’t put all your exit eggs in one basket.
Pillar #5: Post-Exit Planning
Here’s the part most people ignore: what happens after the exit?
I’ve seen entrepreneurs sell their businesses for life-changing money, only to spiral into depression within six months. Their identity was tied to the business. Their purpose was tied to the work. When those disappeared, they were lost.
I learned this from completing 75 Hard: discipline without purpose is just suffering. An exit without a vision for what comes next is just the end, not a transition.
Before you exit, answer these questions honestly: What will you do with your time? How will you maintain purpose? What relationships will fill the void your business relationships leave? How will you stay engaged without your business?
Your post-exit plan matters as much as your exit strategy. Maybe more.
Exit Strategies for Different Investment Types
Businesses aren’t the only assets that need exit strategies. Every investment in your portfolio should have a clear path to liquidity.
Real Estate Exits
Real estate offers multiple exit paths: outright sale, 1031 exchange into another property, holding for cash flow, or passing to heirs with a stepped-up basis.
The best real estate investors I know decide their exit strategy before they close on the property. They know whether they’re buying for appreciation, cash flow, or strategic development. That decision informs everything from financing structure to property management approach.
Alternative Investment Exits
Through Sandstone Group, I’ve deployed over $15 million in oil and gas deals, equipment leasing partnerships, and other alternative investments. These assets have unique exit characteristics.
Some are designed for cash flow over a defined period with no traditional exit. Others have buyout provisions at certain valuation triggers. Still others rely on secondary markets for liquidity.
The key is understanding the exit terms before you invest. What’s the expected hold period? What are the liquidity provisions? What happens if you need to exit early?
I never invest in an alternative asset without understanding exactly how I get my capital back. Neither should you.
Stock Portfolio Exits
Public equities offer daily liquidity, but that doesn’t mean you should trade without strategy.
The best investors have predetermined exit criteria: price targets, fundamental changes, better opportunities, or portfolio rebalancing needs. They don’t let emotion drive selling decisions.
This is where my CPA background serves me well. Tax-loss harvesting, capital gains management, and strategic timing of sales can add significant value to your after-tax returns.
The Exit Planning Timeline
Let me give you a practical framework for planning your exit, regardless of asset type.
5+ Years Before Exit
This is the architecture phase. You’re building the foundation for a successful exit, even if you don’t know exactly when that will be.
At this stage you should be implementing clean financial systems, building a strong management team, documenting your processes, protecting your intellectual property, and diversifying your customer base.
Most importantly, you’re building the business to be valuable independent of you. This is the hardest work because it requires letting go, trusting others, and accepting that things might not be done exactly as you would do them.
3-5 Years Before Exit
Now you’re in the optimization phase. You’re maximizing value across all measurable dimensions.
Focus on EBITDA growth through operational improvements, not just revenue growth. Start getting audited or reviewed financial statements. Build recurring revenue if possible. Reduce customer concentration. Strengthen your competitive moat.
This is also when you should start building relationships with potential buyers, advisors, and intermediaries. You’re not selling yet, but you’re positioning.
1-3 Years Before Exit
This is the preparation phase. You’re getting ready to go to market, even if the market doesn’t know it yet.
Engage a business broker or M&A advisor. Get a professional valuation. Start thinking about deal structure—what terms do you need? All cash? Earnout? Seller financing? Clean your financials one more time. Address any legal issues, disputes, or contingent liabilities.
This is also when you should be stress-testing your management team’s ability to operate without you and preparing emotionally for the transition.
6-12 Months Before Exit
Now you’re in execution mode. Prepare your offering memorandum. Identify potential buyers. Begin confidential outreach. Prepare for due diligence by organizing all documents, contracts, and corporate records.
This is the most intense phase. You’re running the business at peak performance while simultaneously managing a confidential sale process. It’s exhausting. It’s stressful. It’s necessary.
Day of Exit Through 12 Months After
The deal closes. Money hits your account. But you’re not done.
Most exits include a transition period. You’re training the new owner or operator. You’re ensuring customer relationships transfer smoothly. You’re honoring any earnout provisions.
This is also when you’re executing your post-exit plan. You’re investing your proceeds. You’re finding new purpose. You’re designing your next chapter.
The entrepreneurs who thrive post-exit are the ones who planned for this phase as carefully as they planned the exit itself.
Remember: Speed matters, but structure determines whether speed creates value or chaos. A rushed exit rarely maximizes value.
The Biggest Exit Mistakes I've Seen
I’ve witnessed enough exit failures to fill a book. Let me save you some pain by highlighting the most common mistakes.
Mistake #1: Waiting Too Long
Entrepreneurs fall in love with their businesses. They ignore industry headwinds. They miss their optimal exit window.
I’ve seen businesses that could have sold for eight figures become worth half that because the owner waited two years too long. Market timing isn’t everything, but it matters enormously.
Mistake #2: Overestimating Value
Your business is worth what someone will pay for it, not what you think it should be worth based on your sweat equity.
The fastest way to kill a deal is to be unrealistic about valuation. Get a professional valuation. Listen to market feedback. Be willing to adjust your expectations based on reality.
Mistake #3: Poor Advisory Team
Using your golf buddy who’s a lawyer or your nephew who just got his CPA license is not the path to a successful exit.
Exits require specialized expertise. M&A attorneys, business brokers, tax strategists, and deal advisors who have done this hundreds of times. The cost of great advisors is negligible compared to the value they create.
Mistake #4: Neglecting Tax Planning
A successful exit can create a massive tax liability. Without proper planning, you could lose 40%+ of your proceeds to taxes.
There are strategies installment sales, QSB stock exclusions, charitable remainder trusts, opportunity zone investments, that can dramatically reduce your tax burden. But these strategies require advance planning.
As a CPA, this is where I add the most value for clients. The technical tax planning around an exit can be worth millions in after-tax proceeds.
Building Your Personal Exit Blueprint
Knowledge without action is just entertainment. So let’s make this practical.
Here’s your implementation framework for creating an exit strategy that actually works:
Step One: Define Your Why
Why are you building this business or investment portfolio? What does success actually look like? When you close your eyes and imagine your ideal day five years from now, what are you doing?
Your exit strategy should support that vision, not contradict it.
Step Two: Assess Current Value
Get an objective assessment of what your business or investments are worth today. Not what you hope they’re worth. Not what you need them to be worth. What they’re actually worth based on market multiples and comparable transactions.
This baseline gives you a starting point for improvement.
Step Three: Identify Value Gaps
Where is your business or investment portfolio falling short of optimal exit value? Is it customer concentration? Financial reporting? Key person dependency? Lack of systems?
Make a list. Prioritize based on impact and feasibility. Create a plan to address the top three gaps over the next 12 months.
Step Four: Choose Your Exit Path
Based on your values, timeline, and business characteristics, which exit type makes the most sense? Be honest. Not all paths are available to all businesses.
If your business isn’t attractive to strategic buyers, don’t waste time chasing that path. If you need liquidity in three years, don’t plan for a family succession that takes ten years.
Step Five: Build Your Team
Who will help you execute this exit? You need advisors, not just cheerleaders.
At minimum you’ll want a CPA with M&A experience, an attorney who specializes in business transactions, and either a business broker or investment banker depending on your business size.
Step Six: Execute With Discipline
Parkinson’s Law says work expands to fill the time available. Set deadlines. Create milestones. Track progress.
The brick wall of wealth is built one brick at a time. Your exit strategy is no different.
“Mentors are guides, not maps. I can show you the strategy, but you have to walk the path.”
Exit Strategy and Life Strategy
Here’s what I wish someone had told me when I was 18, scaling my painting company without any real strategy:
Your exit strategy isn’t separate from your life strategy. They’re the same thing.
Every decision you make about how to structure your business, where to invest capital, which opportunities to pursue—these are all exit decisions. They’re decisions about how you’ll eventually transition, what value you’ll have created, and what life you’ll step into after the transition.
When I completed 75 Hard in honor of my late brother, I learned that discipline without purpose is suffering. The same principle applies to business building.
An exit strategy without a compelling vision for what comes after is just an ending, not a transition. It’s closing a door without opening a window.
The most successful exits I’ve seen aren’t the ones that deliver the biggest checks. They’re the ones that move the entrepreneur closer to their ideal life, their authentic self, their definition of joy.
Because here’s the truth: the road to being a millionaire is a false summit. The true summit is joy.
Your exit strategy should be designed to get you to that summit, not just to a bigger bank account.
Your Next Steps
Don’t let another quarter pass without a clear exit strategy. Whether you’re planning to transition in one year or ten years, the work starts now.
Here’s what to do this week, not someday:
By Friday: Schedule a meeting with your CPA and attorney to discuss your current business structure and exit implications. If they can’t speak intelligently about exit planning, it’s time to find advisors who can.
This Month: Get a professional business valuation or portfolio assessment. You need to know where you stand before you can plan where you’re going.
This Quarter: Identify your top three value gaps and create action plans to address them. Maybe it’s hiring a COO to reduce key person risk. Maybe it’s implementing better financial reporting. Maybe it’s diversifying your customer base.
This Year: Build your advisory team and create a written exit plan with specific milestones and timelines. This document will evolve, but it gives you direction.
Remember: discipline should not be optional. Every successful entrepreneur I know has a proactive exit strategy. They don’t wait until they’re burned out. They plan from day one. They optimize continuously.
You deserve to exit on your terms. Not through desperation, not through crisis, but through strategic design and intentional execution.
Because at the end of the day, this isn’t just about selling a business or liquidating investments. It’s about building a life where you have the freedom to live as your authentic self. To design your ideal day. To experience joy not someday, but right now.
That’s what I want for you. That’s what I want for all of us.
Take Action Now
We’re not competing for a finite amount of success. When you win, it creates space for others to win. When you build wealth with intention and purpose, you inspire those around you to do the same.
So take action. Plan strategically. Exit on your terms. Build your future brick by brick.
And remember: the goal isn’t just to become a millionaire. The goal is to build a life of fulfillment, freedom, and joy.
Let’s invest for joy!
