As we step into 2025, entrepreneurs are reflecting on their journeys and contemplating the next steps in their business ventures. For those looking to build and ultimately exit their businesses, there are a few aspects to consider regarding your preparation and strategy. At STS, we emphasize the importance of viewing your business through the lens of potential buyers and strategically planning your exit well in advance.
Here are 7 key lessons to inspire your exit journey this year.
Table of Contents
1. Contextualizing Your Exit: How Others See You and Your Business
2. Focusing on Growth and Potential
3. Start the Process Early: Aim for 18 Months to 3 Years in Advance
4. Identifying Natural Buyers: Strategic Partnerships
5. Aligning with Stakeholders: Desired Outcomes
6. Think Beyond Your Existing Paradigm
7. The Power of Storytelling in Your Exit Strategy
1. Contextualizing Your Exit: How Others See You and Your Business
Understanding how potential buyers perceive your business requires stepping outside your familiar routine and seeing your company from an external perspective. Buyers are not just looking for a solid product or service; they want to see a vision, a culture, and a brand that resonates with their own objectives. It’s about finding those “Rembrandts in the Attic” and positioning them in the best way possible.
To facilitate this, it’s critical to really understand your buyer preferences and behaviors. What are the current trends in your industry? What challenges are potential buyers facing that your business can help solve? Anticipate where things are going and position your company as a solution to these challenges, showcasing not only what you offer but also how you fit into the larger market landscape.
2. Focusing on Growth and Potential
Strategic buyers are typically interested in the growth trajectory and future potential profit of businesses. To attract buyers, build a scalable model that showcases your own existing business and its real growth potential in the hands of a strategic buyer. This involves evaluating your operations, identifying areas for improvement and new growth avenues (e.g. product/service, channel, geography), and implementing strategies that enhance your current performance while setting the stage for future profitable growth.
While it may be assumed you and your team know these things, conducting a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) to gain a clearer picture of your business’s position can shed light on faulty assumptions or variations in your leadership team’s understanding of reality identify expansion opportunities, whether through new product lines, geographical expansion, or strategic partnerships.
3. Start the Process Early: Aim for 18 Months to 3 Years in Advance
Preparing for an exit is not a last-minute endeavor. We recommend starting this process at least 18 months in advance. This timeframe allows you to refine your business model, improve financial performance, and establish a clear narrative about your company’s value. It also puts a laser focus on what matters to strategic buyers in the run-up to a process.
Start by assessing your financial health. Are your financial statements in order? Do you have accurate and up-to-date records? Potential buyers will scrutinize your financials, so it’s important to have a transparent and organized financial structure. A Quality of Earnings (QoE) will also help you identify and rectify any discrepancies before they become red flags during due diligence.
Unlike standard financial statements, a QoE report digs deeper into the sustainability of your earnings, identifying the sources of revenue, potential risks, and any anomalies. By commissioning a QoE report you gain valuable 3rd party credibility to any add-backs or adjustments we want strategic buyers to support. Buyers place a lot of value on transparency, and having a QoE in hand demonstrates a commitment to accuracy and financial clarity.
4. Identifying Natural Buyers: Strategic Partnerships
Consider who your natural buyers might be. These could include strategic partners who align with your vision and values. Networking with these potential buyers and industry players can help you uncover opportunities for collaboration and growth.
Outside of the natural buyer list, look for companies that complement your offerings or have a similar target market. For example, if you operate in the technology sector, consider reaching out to businesses in adjacent fields that could benefit from your services. Engage with industry associations and attend relevant trade shows and networking events to expand your options. We find the most strategic buyers often come from non-obvious ideas. This proactive approach positions you favorably in the market and generally creates a more competitive buyer pool that leads to more successful exits.
5. Aligning with Stakeholders: Desired Outcomes
Align your vision for the sale of your business and its future with all your stakeholders, ensuring everyone understands their roles, responsibilities, and the desired outcomes. This clarity fosters collaboration and can enhance your business’s value.
Regular communication is key to managing expectations and keeping everyone on the same page as you move toward your exit strategy. Consider hosting regular meetings “above the fray” to discuss strategic view progress, challenges, and opportunities. Promoting transparency at this higher level strengthens trust and aligns everyone toward achieving the same big-picture objectives.
It’s also important to think about the emotional impact of an exit. Be mindful of how your decision affects employees, customers, and other stakeholders, and be prepared to address concerns.
6. Think Beyond Your Existing Paradigm
As you consider your exit strategy, you should think big and beyond what seems possible. Avoid letting a small circle of insiders or existing advisors limit your vision. Embrace innovative ideas and be open to exploring unconventional pathways.
Engaging with diverse perspectives can spark new ideas and help you identify opportunities that you may have previously overlooked. Consider engaging a mentor or coach who can provide objective insights and challenge your thinking. A fresh perspective can help you break through mental barriers and explore new avenues for growth.
7. The Power of Storytelling in Your Exit Strategy
When preparing for an exit, storytelling plays a big role in how you present your business to potential buyers. Craft a compelling narrative that highlights your company’s journey, mission, and vision. Buyers want to connect with the story behind your brand and understand the value it brings to the market.
Use storytelling to communicate not just your financial successes but also the impact your business has had on customers and the community. Highlight customer testimonials, case studies, and milestones that demonstrate your company’s value. A well-told story can resonate deeply with buyers, making them more likely to invest in your business.
Go into 2025 with Integrity, Clarity, and Action
The journey toward a successful business exit requires careful planning and a strategic mindset. By building strong partnerships, thinking strategically, and aligning with stakeholders, you can enhance your thriving business primed for success in 2025 and beyond. As you navigate this process, remember the power of gratitude in opening doors and guiding you toward success.
As Smoke Wallin, STS Managing Director, often says, “Gratitude is the key to accessing consciousness. When we approach every decision with an attitude of gratitude and a positive mindset, we unlock the ability to dream and think bigger, revealing opportunities that would otherwise remain hidden.” 
At STS, we understand the challenges of preparing for an exit because we’ve been in your shoes. We’re not just advisors – we’re empaths who know what it’s like to build, grow, and eventually sell a business. With our experience, strategic insight, and genuine care, we’re here to guide you through the complexities of an exit, ensuring you move from Success to Significance™ and leave a lasting legacy.
Bring STS onboard and let us help you unlock the full potential of your business. Here’s to a year of growth, inspiration, and achieving your entrepreneurial dreams!
