The Pathway to Deeper Deal Flow

By Exit Planning Institute
Published: October 1, 2023 | Last updated: March 22, 2024
Key Takeaways

Embracing exit planning in M&A transactions can substantially boost a business's value by shifting focus from income generation to value acceleration, closing the Wealth Gap and Value Gap, and assembling a strong advisory team for a successful transition.


When working with an owner on their transaction, how does an M&A advisor ensure that the business is as valuable as possible at the point of transition? What steps can be taken to maximize business value, improve the owner’s multiple, and ultimately increase the net proceeds from the sale?


By exploring the holistic benefits of exit planning, M&A advisors can unlock the potential to not only facilitate seamless transactions but also significantly elevate the value of a business in the eyes of potential buyers.

Rick Krebs, M&A Advisor, CPA, and CEPA and Founder of My Biz Value, shares, “Exit planning causes an exponential increase in business value, not a linear increase. There is very little downside to exit planning as the owner creates more value and a better run business.”


Identifying Value Growth Opportunities

By implementing exit planning strategies into the M&A conversation, Rick was able to positively impact his client’s position in the market, provide a competitive advantage to the owners, and see immense growth potential. Rick shares, “The impact of exit planning was tremendous. Everything my team did was to prepare the owner to exit at the beginning of the conversation. Every decision was made with the ultimate value of the business in mind.”

Exit planning starts with a number. The business owner has a number in mind when thinking about their business sale. If they were to sell for $X million, they could close their Wealth Gap. The Wealth Gap is the difference between the amount an owner needs to lead a successful life outside of their business and the value of the business today. To close the Wealth Gap, owners must improve assets and income within the business as well as assets outside of the business.

When incorporating exit planning measures into the M&A transaction, the business owner was able to build their business value prior to the exit event, thus creating a more valuable business in the eyes of potential buyers.


The Value Gap is the difference between the potential value of the business and the actual value of the business today. To close this gap, the owner can improve the internal workings of the business which will close the Profit Gap and generate more cash to invest in the business. In turn, improved efficiency can lead to greater revenue, compounding the impact on business value. Closing the Value Gap will help close the Wealth Gap by providing greater future financial benefits to the owner.

Owners tend to focus more on income generation than value acceleration in their businesses. The presence of a well-structured exit plan shifts the owner’s strategy away from present revenue goals and more on the future value of the business. In one M&A transaction on which Rick advised, the owners were open to taking value-enhancing measures. They followed the Value Acceleration Methodology created by Exit Planning Institute CEO, Christopher Snider.


The Value Acceleration Methodology is the strategic framework for executing exit planning. It is the value management system that makes the timing of an exit irrelevant. Exit planning is laser-focused on what you can do right now to grow the value of the business and drive income. By focusing the approach on building a business with characteristics that drive value and integrating the owner’s personal and financial objectives into it now, there will be many options to exit on the owner’s timeline and terms.

When working with his client to implement the Value Acceleration Methodology, Rick shares, “We had to get the owners on board with value creation over income generation. We focused on EBITDA to eventually get a price they would accept. The decisions involved in selling a business are large and take time to make, so my team spent the time to build a rapport with the owners and gain their trust.”

Reaching the Right Buyers

Rick shares, “Finding buyers isn’t the hard part. It is getting them to pay the right price that can be tough for owners.” Some owners experience plenty of unsolicited offers to purchase their business, however, with no understanding of business value, they can feel pressured to take the first deal that is offered.

Additionally, some businesses do not receive many offers at all. Rick refers to these owners as “A wallflower at prom finally getting asked to dance, she has stars in her eyes that someone is finally interested so doesn’t see the flaws in the person asking. This owner goes with the one offer and ultimately throws money away during the transaction.”

Owners who do not take the time to adopt a thorough exit planning strategy are ill-prepared for the transaction event. By failing to understand their business value, they can face several issues during the transaction. Without proper exit planning in place, the owners can fail to create competition among potential buyers which results in fewer offers and ultimately a lower sale price.

Exit Planning is Business Planning

Exit planning is not just a plan. It is a strategy rooted in execution that grows value while expanding options so that an owner can transition the business on their terms when they are ready. It aligns the business, personal, and financial needs of the owner. Rick emphasizes, “All worthwhile things require effort. Planning and investing for your future now is especially worth it.”

To execute an effective and impactful exit plan, an owner must work with a trusted team of advisors. This team includes the M&A advisor who facilitates the transaction, as well as a financial advisor, CPA, attorney, value advisor, risk advisor, estate planning attorney, family advisor, banker, board of advisors, and management team. On an owner’s team, advisors must work collaboratively to manage the owner’s business, personal, and financial goals.

Business owners who surround themselves with a holistic team of advisors and trusted professionals will be more successful in their business transition. Exit planning is an important part of owning and running a business. Without proper exit planning strategies in place, owners will miss out on helpful insights into growing and harvesting their business value.

Traditionally, business owners might consider an exit strategy only when the decision to sell is imminent. However, by embracing exit planning earlier in the business lifecycle, the focus shifts from just preparing the business for sale to enhancing its transferable business value.

Learn more about building significant value in your owner’s businesses before the transaction event by incorporating Exit Planning Institute’s Five Stages of Value Maturity into your practice. Request the infographic and begin improving your client’s business value today!

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Exit Planning Institute
The Exit Planning Institute, provides Financial Advisors, Accountants, Consultants, and other advisors of business owners with the crucial education to differentiate themselves, add value to their existing client relationships, and attract new business owners to their firm.

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