The Biggest Exit-Planning Mistakes I See Small Business Owners Make

The Biggest Exit-Planning Mistakes I See Small Business Owners Make

If you’re a small business owner, the effort you put into leaving your company is just as important as the effort you put into starting it. But many business owners, old and new, focus only on getting their companies started and keeping them running, often leading to exit-planning mistakes that hinder a good departure when it’s time to go.

Starting and running your own business can be as challenging as it may be rewarding. Early on, you likely wear lots of hats: the chief executive officer, senior engineer, marketing director, mailroom clerk, and more. That’s a lot to think about day in and day out, and maybe you’re only able to drop a few of those titles as your company grows.

So who has time to think about the end? You might even feel like you don’t want to think about it ending—that’s too painful. But here are some other things that might hurt even more to consider: watching your efforts be ruined by the wrong person taking over, having to pay a huge tax bill once you leave, or not being able to retire.

These are all among the possible results of failing to make succession plans early about how you will later leave the company. To avoid those, take a look at the biggest exit-planning mistakes I see small business owners make, and help prepare your company to last long after you leave.

1. Waiting Too Long to Plan Your Exit

Building a business takes great time and effort. However, some of that time and effort should be reserved for figuring out how you want all the work to end for you. Not thinking about the end at the beginning is among the top exit-planning mistakes made by small business owners.

Planning allows you to work toward building your business until you get to a place where you feel comfortable leaving it in someone else’s hands. It also lets you maximize the value you expect to get out of your company.

2. Thinking You Are Irreplaceable

It’s your business. You’re the one with the skill set to make things happen. This can be a rewarding feeling, but it also can lead to the demise of your company once you move on.

While you have the time, you can use mentoring and delegating to start preparing someone in your workforce to take over and verify processes are documented. By the time you’re ready to retire, you may feel more at ease that the business you built is in good hands.

3. Overvaluing the Business

Often, small businesses are good at one thing, and the company owners believe their businesses to be worth more than they might command in the marketplace. Thinking about where your company is and where you want it to be when you retire or sell has to happen early.

A prompt start can give you time to plan for diversifying and finding additional ways to increase your company’s revenue, making your business more attractive to possible buyers.

4. Forgetting to Plan for Taxes After Your Business Sells

Not thinking through your tax situation before walking out the door is not an exit-planning mistake that should stop you from leaving, but it could be costly and impact your retirement or your life plans after you leave your business behind.

Many small business owners don’t often consider how they can minimize their retirement income tax or estate tax burden and find themselves surprised by a tax bill—one that could greatly impact their financial situation.

5. Failing to Work With a Professional Advisor

Whether you’re retiring, selling your company, or passing your business on to a relative, the transitions and transactions associated with each departure may require more skill than you possess—and more time than you have.

No matter how you leave, you can help yourself by having a qualified professional advisor on your side to help with financial planning, retirement planning, tax planning, estate planning, accounting, and deal structuring.

Avoid Making These Exit-Planning Mistakes

Deerfield Financial Advisors can help you avoid these exit-planning mistakes and use your wealth in ways that are worthwhile to you. We help you develop this in a three-step process we call living your WealthwhileSM. If you have questions about how I can help you live your WealthwhileSM, call (317) 644-7701 or email

About Matt

Matt Roop is Wealth Manager and Shareholder at Deerfield Financial Advisors, a fee-only financial services and wealth management firm with offices in Indianapolis and Chicago. In his role, Matt acts as a personal “chief financial officer” for his clients, overseeing every facet of their financial landscapes, orchestrating strategies to grow their wealth, and enhancing their financial clarity. Catering to the distinct needs of lawyers, engineers, and business owners, he empowers them to embrace their passions and lead their optimal lives. Matt conveys a depth of experience and a calm demeanor that clients find reassuring and soothing, and he loves providing peace and confidence around their financial future.

Matt received a Bachelor of Science from Indiana University and a Master of Business Administration (MBA) from George Washington University. He is a NAPFA Registered Financial Advisor and holds the CERTIFIED FINANCIAL PLANNER™ and Certified Exit Planning Advisor (CEPA) designations. Committed to staying at the forefront of his field, he is actively involved with the Exit Planning Institute, National Association of Personal Financial Advisors, and the Estate Planning Council of Indianapolis. Since 1997, Matt has been involved in the investment and wealth management realm, with experience at Charles Schwab & Co., Inc., as well as a boutique Indianapolis-based independent advisory firm and a brief stint at his family’s closely held business.

Outside the professional realm, Matt serves his Indianapolis community by volunteering for Meals on Wheels of Hamilton County and is on the Executive Leadership Team for the Indiana Alzheimer’s Association’s Walk to End Alzheimer’s. He is dedicated to financial stewardship and continuous growth, with an unyielding commitment to enhancing the lives of both his clients and his community. Matt and his wife, Kimberly, reside in Carmel, IN, with their four children, who are all pursuing their college dreams. When he’s not working, he enjoys traveling, reading, and spending time at his lake house in southern Indiana with family. To learn more about Matt, connect with him on LinkedIn.


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