Why Every Business Needs an Exit Plan
Every business owner dreams of success—but few prepare for what comes after. Whether through retirement, growth, or unexpected life events, every business will face a transition. As guest Nancy Mills explained on the Building the Premier Accounting Firm podcast, “Exit planning isn’t about selling tomorrow—it’s about making sure your business is ready when life happens.”
In this episode, hosted by Roger Knecht, President of Universal Accounting Center, the discussion centers on how to plan, prepare, and maximize value long before the “For Sale” sign goes up. From valuation and financial structuring to the emotional side of letting go, Mills offers actionable strategies every business owner and accountant should know.
Meet the Expert: Nancy Mills
Nancy Mills is a respected exit strategist, speaker, and advisor who helps executives and entrepreneurs optimize their companies for investment, expansion, and eventual sale. With years of experience in mergers and acquisitions, she specializes in preparing businesses for successful transitions.
Roger described her as someone who “brings energy, expertise, and real-world insights to business owners.” Nancy works with leaders to ensure their companies are structured, valued, and emotionally ready for the next chapter—whether that’s a sale, merger, or succession.
Understanding the True Meaning of Exit Planning
Too often, business owners view exit planning as something to consider only when it’s time to sell. Nancy challenges this misconception. “People think exit planning means putting your company on the market right away,” she said. “That’s not true. It’s about building a business that can live independently of you.”
Roger likened it to raising a child—one that grows from dependency to independence. “You need to build your business so it can operate without you,” he explained. “A self-sustaining business is one that can thrive in your absence.”
That independence isn’t just operational; it’s financial. A business that runs smoothly without its owner commands a higher valuation and attracts more serious buyers.
Why Accountants Are Key to a Successful Exit
Exit planning isn’t a solo effort—it requires a trusted team. Nancy emphasized that accountants often play a critical role. “Accountants bring the most valuable asset to the table: accurate and timely financials,” she said. “Three years of clean financials make a company much more marketable.”
She recommends business owners begin the process at least three years before a planned exit. This allows time to clean up financial records, restructure entities if needed, and address weak areas that could lower value.
Roger added that accountants can be powerful advisors in this process: “We help business owners see beyond the numbers—to understand how their structure, taxes, and valuation all connect.”
How to Value Your Business: Understanding EBITDA & Multiples
Valuation is one of the most misunderstood aspects of selling a business. Nancy and Roger spent a significant portion of the conversation demystifying EBITDA—Earnings Before Interest, Taxes, Depreciation, and Amortization—as a core measure of value.
Nancy explained, “A business is often valued on a multiple of EBITDA. But you can’t just use a standard number—industry, size, and structure all matter.” She added that larger companies typically command higher multiples, especially once they cross revenue thresholds like $5 million or $10 million.
Roger echoed this point, noting that accountants can help owners “understand the tax implications and entity structure differences between a sole proprietorship, S-Corp, or C-Corp” well before a sale.
For smaller businesses, Nancy said that cleaning up books, reducing owner dependency, and introducing recurring revenue can significantly boost valuation. “If your business can run without you and has predictable income, it’s instantly worth more.”
Structuring Your Exit: Buyouts, Earnouts & Legal Protections
Selling a business isn’t as simple as handing over the keys. Many deals involve earnout agreements, where part of the sale price is contingent on future performance. Nancy warned, “Earnouts can be tricky. I’ve seen sellers lose large portions of their sale price because they didn’t meet targets that weren’t fully under their control.”
She advised sellers to negotiate clear terms and involve experienced legal counsel early. Roger agreed, adding, “You need a good lawyer to build in contingencies—so if the relationship doesn’t work out, you still walk away protected.”
This careful structuring ensures sellers aren’t penalized for post-sale events or unrealistic performance expectations.
The Emotional Side of Letting Go
Beyond numbers, selling a business is deeply personal. Many owners struggle with the identity shift that follows an exit. Nancy shared, “It’s often disguised as a financial concern—‘I need more money’—but it’s really emotional. They’re not ready to let go.”
Roger expanded on this metaphor, comparing it again to parenthood: “You raise your business like a child, and one day, it grows up and leaves home. You have to trust that you built it to stand on its own.”
Nancy recommends that owners prepare mentally and emotionally by gradually reducing involvement and exploring new passions or causes. “Golf is not a long-term plan,” she quipped. “You need something meaningful to move into after the sale.”
Success Stories: Lessons from Real Exit Transformations
Nancy shared several real-world examples that highlight the power of proper planning.
One client—a medical software company—was initially valued at $8 million. By transitioning to a software-as-a-service (SaaS) model and developing retention plans for key employees, the company later sold for $43 million. “Recurring revenue changes everything,” Nancy said.
Another story involved a vending company with two partners. Instead of a traditional buyout, they brought in a minority investor who helped grow the business. “It wasn’t a sell-or-don’t-sell situation,” Nancy explained. “They got a second bite of the apple when they eventually sold again for much more.”
Both stories illustrate the same lesson: preparation multiplies value.
Turning Exit Planning Into an Advisory Opportunity
For accounting professionals, this conversation highlights a major opportunity. Exit planning naturally evolves into advisory and CFO services, helping accountants deepen relationships with clients.
Roger summarized it best: “These conversations about valuation and exit planning are the gateway to offering CFO-level advisory work. You’re not just their accountant—you’re their profit and growth expert.”
Programs like Universal Accounting’s Profit and Growth Expert course help professionals build the skills to guide clients through such transitions.
Key Takeaways: Begin With the End in Mind
Nancy’s closing message was clear: “Every business owner has more options than they realize. Start early—three years or more—and surround yourself with trusted advisors who understand the process.”
By planning ahead, business owners can exit on their terms, for the value they deserve, and with a lasting legacy.
Roger closed the episode with his signature reminder: “Accounting success is universal.”
Listen to the full episode of Building the Premier Accounting Firm featuring Nancy Mills to learn how to prepare your business for sale, protect its value, and plan for what’s next.
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