How to Start Business Exit Planning - and 4 Practical Paths to Consider

If you’re like many seasoned business owners, thinking about stepping back from the company you built can stir up mixed emotions. You may be curious about your options, but it’s easy to quickly feel overwhelmed on top of the pressures of your day-to-day. And if your business is a big part of who you are, even starting the conversation can feel uncomfortable. You’re not alone.

A Simple, Practical Structure

The good news is that there’s a simple way to bring structure — and a bit of calm — to starting the decision-making process.

It’s called the Three Legs of the Stool.

This approach helps you look at your exit from three angles that support one another, just like a sturdy, well-built stool:

1. Personal Goals
2. Financial Goals
3. Business Goals

Once you look at all three legs, it becomes much easier to begin comparing four common business transition paths:

• Sale to an outside buyer
• Sale to key employees
• Sale to a broader employee group
• Sale to family

How to Start Planning

Here is a basic guide with questions to ask yourself to help you understand each “leg” of the stool and how it applies to these four transition paths. As you proceed, most owners will assemble a small team of qualified professionals to work with:

• A financial planner
• An accountant
• An attorney
• A business advisor (exit planner, broker, or consultant)

You stay firmly in control; these professionals simply help you understand and think through your options.

Leg 1: Personal Goals

How ready am I — emotionally and practically — to step away?

This leg is often the most overlooked, yet it carries the greatest emotional weight.

Ask yourself:

• What does life after the business look like?
• How involved do I want to be after the transition?
• Am I ready to let others make decisions I used to make?
• How will stepping back affect my sense of purpose and community?

How does this leg apply to each transition path?

Sale to an outsider

This can be the cleanest break. But it may also feel like a loss of identity because someone else now calls the shots. Owners who want a clear next chapter often find this path appealing.

Sale to key employees

There’s comfort in knowing the business will be in familiar hands. The emotional transition tends to be gentler, but it can take longer, so you may need to stay involved for a while.

Sale to a broader employee group (e.g., ESOP or similar structure)

This option can be meaningful if your workforce feels like family. You may take pride in helping your employees build ownership, but you’ll still need clarity on how involved you want to be after the transition.

Sale to family

This path is often rewarding but can be emotionally complicated. Family dynamics, expectations, and communication styles all matter. It requires honest conversations early and often.

Leg 2: Financial Goals

Can I step away and still live the life I want?

This leg is about your personal financial independence. It’s not just about what the business might sell for — it’s about what you need to feel secure in your next chapter.

Ask yourself:

• What income will I need after stepping back?
• What savings or other resources do I have outside the business?
• How much do I need from the sale to reach my long-term goals?
• How flexible am I willing to be on the timing or structure of payments?

How does this leg apply to each transition path?

Sale to an outsider

Often provides the largest upfront payment, which can help you feel secure sooner. Timing is usually faster, but value depends on market conditions.

Sale to key employees

Key employees know the business well, but they may not have the money for a large immediate payment. These deals sometimes require seller financing or a gradual buyout.

Sale to a broader employee group

Employee-based sales can create competitive valuations, but the payment structure may be more spread out over time. This can work well for owners who do not need a large lump sum all at once.

Sale to family

Family buyers often rely on gradual payments, which can work well if your financial plan doesn’t require a big upfront sum. But you still need clarity about what you need financially—not just what feels emotionally satisfying.

Leg 3: Business Goals

Is the company strong enough to transition successfully without me?

This leg focuses on whether the business can run well with less of your day-to-day involvement.

Ask yourself:

• Can the business operate smoothly without me?
• Are key processes written down?
• Does the team have clear roles and authority?
• Are financial records clean and transparent?
• Is the business able to handle debt or financing if the sale requires it?

How does this leg apply to each transition path?

Sale to an outsider

Outside buyers want a business that runs well on its own. Strong financials, a stable customer base, and a capable management team make this path easier.

Sale to key employees

Your employees already know the business, but they may need training, mentorship, or a leadership development plan before they’re ready to take over.

Sale to a broader employee group

Employee-based transitions work best for businesses with stable earnings, predictable cash flow, and a strong culture. A broad group of owners requires strong systems and communication.

Sale to family

Family successors often need time to develop leadership skills and deepen their experience. Planning early gives them a better chance to succeed.

Putting It All Together

Think of the Three Legs of the Stool as a balanced, steady way to look at your transition options.

If one leg is weak or ignored, the whole stool becomes unsteady.

By checking your readiness in all three areas — your personal, financial, and business goals — you can compare each transition path more clearly and choose the one that fits not just your business, but your life.

This approach doesn’t rush you.
It helps you move at your own pace, with confidence and clarity.

Resources

Business Owner Exit Planning Presentation, hosted by Clute Wealth Management, Oct. 2, 2025 (PDF)

Family Business Initiative, University of Vermont Grossman School of Business

What is Exit Planning? Exit Planning Institute

Employee Ownership Trusts (EOTs) v. ESOPs: Which Is Right for You?
National Center for Employee Ownership

Are you Ready? 10 Ways to Check if You are Ready for a Business Transition — Exit Planning Institute (pdf)

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Christina Ubl, CFP®, CDFA®, CEPA® (Certified Exit Planning Advisor) of Clute Wealth Management in South Burlington, VT, and Plattsburgh, NY, an independent firm that provides strategic financial planning for individuals and small businesses in the Lake Champlain Valley region. Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA SIPC.