10 Smart Moves Every Business Owner Should Make 5 Years Before Exit

Preparing to step away from your business? Here's how to set yourself and your legacy up for success.

For many business owners, selling or exiting their company is the culmination of decades of hard work. But it’s not just about signing on the dotted line and riding off into the sunset. A successful exit takes planning, strategy, and time, ideally five years or more. Whether you’re selling to a third party, transitioning to a family member, or grooming internal successors, here are ten essential things you should do now to prepare for a smooth and profitable exit.

Clarify Your Exit Goals

Start with the big questions:

• Do you want to sell to an external buyer, pass the business on, or wind it down?

• What legacy do you want to leave behind?

• How much do you need financially to retire comfortably?

Defining your vision helps shape every other decision and creates a benchmark for success.

Get a Business Valuation (and Understand It)

Knowing what your business is worth today is key. A valuation reveals where you stand and highlights the value drivers (and value killers) in your business. Do this early, ideally with the help of a qualified business broker or accountant, so you have time to increase value where needed.

Clean Up the Financials

Buyers will scrutinise your books. Make sure:

• Your financial statements are accurate and up-to-date.

• Personal expenses aren’t mixed into the business.

• There’s a clean record of profitability and consistent growth.

Consider auditing the last 3–5 years of accounts. The cleaner your numbers, the more confident a buyer will be.

Document Systems and Processes

Your business should be able to run without you. Start documenting operations, workflows, policies, supplier agreements, and customer service standards. The more systematised your business is, the more valuable and transferable it becomes.

Strengthen the Management Team

Buyers love businesses with strong, autonomous teams. Identify key players and begin delegating more of your responsibilities to them. Invest in leadership development to ensure the team can thrive post-exit.

Review and Lock Down Contracts

Buyers want predictable revenue. Make sure:

• Customer and supplier contracts are up-to-date, transferable, and favourable.

• Any intellectual property is registered and owned by the business.

• Lease agreements and licenses are in good standing.

Ironing out legal risks early prevents nasty surprises during due diligence.

Reduce Owner Dependence

If you're the rainmaker, decision-maker, and brand ambassador all in one, that's a red flag. Start pulling yourself out of the spotlight. Let others take the lead with clients, operations, and suppliers. The business should thrive without your daily input.

Maximise Recurring Revenue and Profitability

In the final years, focus on initiatives that increase profitability and generate predictable cash flow. This could mean:

• Shifting to subscription models.

• Diversifying your customer base.

• Cutting unprofitable services or clients.

More recurring revenue = higher valuation.

Engage the Right Advisors

Assemble your dream team:

• Accountant

• Tax advisor

• Lawyer

• Exit planning consultant or business broker. They’ll help you navigate valuation, tax planning, deal structure, and legal issues to protect your interests.

  
  

Create a Personal Financial Plan

What will life look like after the exit? Work with a financial planner to:

• Calculate how much you’ll need.

• Manage potential tax liabilities.

• Invest proceeds wisely.

The exit is not the finish line, it’s the start of a new chapter.

Preparing your business for exit is a process, not an event. Starting five years out gives you the time to increase value, reduce risk, and make the transition smoother for everyone involved. Whether your exit is just a glimmer in the distance or already on the horizon, the sooner you begin planning, the better your outcome will be.