In this episode of Money Talk With Tiff, Tiffany Grant is joined by Adam Koos to discuss the often overlooked topic of exit planning for business owners. Adam emphasizes the importance of preparing for the eventual transition of one's business, whether that means selling it, passing it to a family member, or another form of exit. Adam shares that one of the biggest mistakes business owners make is starting too late on their exit strategy.

He dives deep into what exit planning entails, how business owners can begin thinking about it regardless of where they are in their business journey, and the critical steps to take. From succession planning, valuation of the company, preparing for potential unplanned events such as illness or disability, to ensuring the business is scalable and attractive to potential buyers, Adam covers key elements that need attention.

Through actionable insights and real-world examples, Adam shares why and how business owners should start planning their exit strategy today to maximize the future value and ensure a seamless transition.

Check out the full show notes: https://moneytalkwitht.com/podcast-show-notes/business-exit-planning/

Takeaways

• Exit planning is crucial for business owners, yet many start the process too late.
• Most entrepreneurs neglect exit planning because they're too focused on daily operations.
• Starting exit planning early can significantly increase a business's market value and reduce risks.
• Succession planning ensures that your business can thrive even in your absence or unexpected events.
• 80% of businesses never sell, highlighting the importance of a solid exit strategy.
• The earlier you plan for exiting your business, the more options and value you'll have.

Resources Mentioned

• elevateandexit.com
• moneytalkwitht.com
• libertaswealth.com

For continued insights on financial strategies and business tips, tune in every Thursday for a new episode of Money Talk With Tiff. Connect with Tiffany Grant on all social media platforms @MoneyTalkWithT.

Support this Podcast

Copyright 2025 Tiffany Grant

You know what it is. That's right. It's time to talk money with your money nerd and financial coach. Now tighten those purse strings and open those ears.

It's the Money Talk with Tiff podcast.

Hey, everyone. I am so excited because I have Adam Koch on the line, and Adam is here to talk to us about what businesses get wrong about exit planning.

So after you're done with your business, what do you do next? So thank you so much, Adam.

No, thank you for having me. This is going to be fun.

Yeah, for sure. So let's hop right in. First and foremost, what is exit planning?

I'm so glad you asked because I thought, you know, I probably should back up, rewind and talk to people about what that even means. And sadly, I think most non business owners don't know what exit planning is.

And I think that even more sadly, many business owners know what it is, but they don't know when they need to start planning for it, how they need to plan for it.

But exit planning, I'll call it also business transition planning is essentially the act of going from being a successful business owner to parting ways with your company, exiting your business and passing it along to whatever's next, whether that's an auction buyer, a competitive buyer that's in the same, same sector, maybe a competitor in the same industry, selling it to your employees as like an esop, that's one strategy. Or, you know, keeping it in the family and selling the company to, you know, a child or, you know, niece, nephew, son, daughter, things like that.

So that's essentially what exit planning is. It's, it's the, the act of retirement if I want to keep it that simple for business owners.

Yeah, thank you so much for the explanation. And, you know, I feel like this is something that's not talked about enough.

Like, I feel like as entrepreneurs, we're just so much in the daily grind that we don't think about this exit planning. So what are some things that small business owners get wrong about exit planning?

Well, first of all, you just, you said that so gorgeously.

Because the reason this is, I'm so passionate about this topic and the reason we've made it such a big part of our business at Libertas Wealth Management Group is because it's. Nobody knows about it. It's. There's not enough awareness. So the fact that you're doing a podcast and making this a topic is so huge.

Because you're right.

I mean, most business owners are so caught up selling their service, managing their team, all the Things that business owners do, Paying the bills, you know, just running the company that, you know, what often happens, and probably the biggest mistake or the biggest thing that they get wrong is just starting too late. When it comes to the planning. They'll say, you know, oh, yeah, you know, I'm.

I'd like to retire at, you know, 65, or, you know, dial it back at 65 and quit and sell the business at 70. But they just put it off and put it off.

And I can't count the number of times I've talked to a business owner, whether that be on the phone, over lunch, happy hour, in a. In a review meeting. And I'll say, so what are you thinking about in terms of selling the company and walking away? And they'll.

And, you know, last year you were talking about maybe parting ways in about two to three years. What are you thinking? You want to know what the answer always is? Two to three years.

Another two to three years is fine.

Yeah. It doesn't change. It's always two to three years from now. And so what happens is there's so many. I mean, we could.

We could do another podcast just on the mistakes that get made and the problems that occur as a result of starting too late. But just to give you a tease with a couple of them, you know, what if you get divorced now? What. How's the ownership of the company set up?

How is the divorce having nothing to do with ownership? How is the divorce going to affect you as an owner, a leader, and an employee within your company? What if you get disabled?

What if you get a disease, Parkinson's, dementia, because you waited too long, now all of a sudden, your company's being sold at a fire sale. Because everybody knows in your.

In your industry and in the city you live in, they start to catch wind because, you know, word travels fast, and now you're not getting nearly what you wanted for it. What if you pass away and you haven't planned for that in advance? It's not like you're.

If you're married, your spouse can't just walk in and start running the company. You know, like, for me, I.

I own a couple companies, but I know that my spouse isn't even licensed to be a financial advisor, wealth manager, financial planner. So how much is my company going to be sold for if I pass away prematurely? And I didn't plan for that. So there's selling.

The number one thing that business owners get wrong is starting too late when it comes to planning their transition and planning their exit.

Gotcha. Gotcha. And you know, you said so many gems right there. One question I have for you. What is too late?

Like how soon in business should we start thinking about exit planning?

Sure. No, that's a great question. What is too late? Well, since we can't, I'm going to give you the long answer to the second part of the question.

When people ask a question about things like what do you think is going to happen with the stock market after the election? It's like, well, I keep trying to get this crystal ball to work and it just won't work.

But anyway, so since we don't know and can't predict the future, I don't know what we consider to be too late because we just don't know what the future holds. But the second part of your question is really the gem. And that is how soon should we start planning?

And this is not sales, this is not me trying to give the audience some one liner or get business owners, give them some cliche answer. But the answer is as soon as possible. And there's multiple reasons for that.

But it doesn't matter if you're selling your business in three years, 13 years or 30 years. You need to start planning to transition your business or to exit your business now.

And there's a number of reasons why, but that's the, that's when you need to start right now.

Gotcha. Gotcha. And you know, this is something that, like I said, we never think about. And so somebody's listening.

They might be, you know, 20 years in, might be their first year in, you know. So what I'm hearing is if you have a small business that's an actual business, so not hobbies and things like that, that's important to say.

Then the time is now. Like it doesn't matter where you are in business as long as it's an actual business and running well, does that sum it up A hundred percent?

100%? No, you're right.

Perfect. Perfect. Okay, so I got homework to do. But as I say homework though, that brings me to my next question.

What are some things we should think about when it comes to our exit strategy?

Well, that's, ironically enough, you know, the reason why we need to start early. So Some of the biggest, most important things, there's lots of, there's, there's more than we have time for in this 15 minutes.

But if I just start rattling off a few, a few things. One would be succession planning. So we talked about what happens if we pass away, become disabled by having a succession plan in your business.

If, if something's going to happen to you at 30, 35, 40, 50, 60, it doesn't matter what age.

That right off the bat is something that, if you start doing some business transition planning, some exit planning in your business, if you, if you put together an exit plan today.

And that's why, by the way, as a side note here, the reason I call it business transition planning is because of the problem I think we have in this, in, in this business owner world that we all live in as business owners, that whenever somebody hears exit planning, they think, well, I don't need to do that until much, much later. Because they think exit, they think 65, right?

The reason I'm calling it business transition planning is because I want people to get exit planning out of their vocabulary and start thinking it more of how do I transition my company from where it is today to where I want it to be, wherever that might be. Usually it's, I want to be more efficient, I want to have succession in place.

I want to be ready for the inevitable, I want to be ready for emergencies. I want to make more money, so I want to become more profitable. I want to de risk my company.

So for instance, my revenue is, 30% of my revenue is my top client. That's a problem. That's called customer concentration.

So there's all kinds of things that we can do as part of business transition planning that ironically enough, if we start putting together evaluation and then we figure out, here's where our company's worth today, the first thing the owner is going to do is say, I disagree, they think it's worth more. It always happens.

But once we start looking at the value and why it's valued where it is now, we have to do things like clean up the financials, you know, poor record keeping, excessive expenses, expenses, you know, something called recasting.

When valuing a business, valuating a business, you have to add, take, take all the personal expenses that you're running through the business and take those out, which includes the owner's salary, and that increases the value of the company. I mentioned succession planning early earlier. That's, that's crucial. We have to have a succession plan in place.

So when a buyer comes in and Says, all right, you know, if I buy this company and this person leaves, or if they pass away during the, during the negotiation, I don't think I want it anymore right now. What about continuation planning, something people call often, you know, golden handcuffs.

So a business owner comes in and they say, okay, well, I'm looking to buy this company. What happens if the owner leaves? Are the, Are all the executives going to leave, too?

You know, are all the people who are important to making this thing run, are they gone? And now I'm sitting here losing clients, customers. So that's important.

And so what you end up finding out here at the end of the day, and I know I just touched on a few of these topics, but what you end up happening is if you implement a business transition plan, or if you want to call it an exit plan, that's fine. And you do that now, what you're going to end up with is less risk in your business. You're going to end up with more profit and growing profits.

You're going to end up with happy employees, continuation planning, succession planning, and you're going to have less risk, all while growing more and exponentially over time. So that when you are ready to sell, you will have grown so much more by implementing this process now as opposed to waiting till later.

And, oh, by the way, let's just say out of the blue, for whatever reason, you have a competitor or somebody that just shows up at your door one day because the timing is right, and they say, you know, hey, I'm, I'm interested in buying your company. Let's sit down and look at the books. You've already prepared for it. You're already ready. You don't have to get ready. And again, getting ready.

I didn't say this before, but it takes at least two years to really implement a plan and do it the right way and then implement that well, get the plan created and then implement that plan over the course of, say, one to two years. So putting the plan in place takes a year, and then implementing the plan takes another year or two.

Wow. Wow.

And, you know, I'm glad you mentioned valuating your business so getting valuations, because that's something that I did maybe about a couple of years ago or so, and I was pleasantly surprised. I said, okay, that's awesome.

However, there were some things that the lady was like this that you need to do now in order to get a better valuation in the future.

So that's why I totally agree with you when you say start now, wherever you are, because, like the small little changes that I made today in the future is worth thousands and thousands of dollars.

It's crazy how that works. Just compounding interest.

Right, right, right. And like, the little changes I made took me like a few button clicks and I was done.

I know, but it's, but it's so hard to do that because even though it's important, it's. There's always something else that seems like it's more important or a box to check off or an email to respond to. You know, there's always something.

Absolutely. Absolutely.

All right, so we're coming up towards the end of the podcast episode, but I want to leave our listeners with one more thing, and that is, I know you already gave us a ton of tips already, but what is one tip you would say for our small business owners when it comes to exit planning or transition planning?

Okay, yeah, no, no, you're good. I appreciate that. By the way, business transition planning. So I'll leave you with this. First of all, roughly 80% of businesses never sell.

Let that sink in for a minute. It's sad. That means that 80% of businesses dissolve. They never sell at all.

Of the 20% of businesses that do sell, 75% of those 20% sell for less than market value. Then to put a cherry on top, and it's not a good cherry, by the way, it's a rotten one. 80% of business owners net worth is tied up in their company.

So do all that math, right? It's more about what happens if you don't plan. You're going to be a statistic.

You're going to be, you could, you could end up part of the 80% that never sells and you get nothing, your family gets nothing.

And all the, all the work you did, the blood, the sweat, the tears, the, the bad hires, the success, it all just, it's all for nothing at the end of the day. And then if you're one of the 20%, but you don't plan, you're not going to even get what your business is worth. That's what the statistics tell us.

And then on top of all that, 80% of your net worth is in that business.

So the advice, the one piece of advice that I would tell anyone listening to this podcast would be to find somebody who's accredited, who has a designation in business.

Transition planning, exit planning, reach out to them, grab coffee, grab lunch, jump on a phone call, zoom meeting, ask some questions and just, just have an intro call. For starters, that's. That'd be the first thing you should do.

And then from there, chances are, if you find the right person, you should probably go through the process. Now again, I don't care if you're 25 or 65, I don't care if you're selling your business in three years or 13 years, as I always say.

But get a plan in place and you'll be, you'll be thanking yourself years upon years later. And just as you said, those little tiny things you do now, and this is going to be a whole lot more than little tiny things, by the way.

But the more you do, the bigger the impact is.

And by doing that planning now, you're going to thank your future, your future self is going to thank you just in compounding effect for doing that planning today.

Yes, yes, I absolutely love that mic drop. That was a perfect way to end. But if people were interested in finding out more about you, more about your practice, how could they find you?

If you're interested in connecting with me personally, easiest way is probably LinkedIn. Just go to LinkedIn. Looked up my, my name, Adam, last name is K O O S as in Sam. It's pronounced Koch, but it looks like coos. Second place to go.

If you're looking for more information on this particular topic. You know, business transition planning, exit planning.

One of the companies that I own is called Elevate and Exit, and the website's actually elevate and exit.com. you know, we don't have a marketing department, so that's how we chose it. And then the.

If you're looking for more personal financial planning, retirement planning, I'll give you one more statistic as we quit here. 75% of business owners who sell one year later are surveyed and say they severely regret selling their business.

And the number one reason why they regret selling their business a year later is because they didn't have a plan for what they were going to do when they were done.

I always joke and kind of call it life after football because there's all those statistics about how, you know, people go to the NFL, NBA, you know, Olympic athletes, and as soon as they're done, which is usually sometime in their mid to late 20s, and that's probably pushing it, right Then they don't know what to do with their lives afterward because their whole life has been football, it's been soccer, it's been volleyball, it's whatever it is, you know what I mean?

So having a plan, a personal financial plan for you, your partner, your spouse, for what life's going to look like and all the things you're going to do when you're done with your business is so crucial. So you can find us@libertas wealth.com which again, we work with, you know, primarily business owners and executives at our office at Libertas.

But then elevate and exit.com is where you can find all the exit planning and business transition planning information.

Yes, thank you so much, Adam. And I'll make sure I have all of those links in the show notes. You keep hitting us with gems, even during your outro. No problem.

But thank you so much for coming and I hope you have a wonderful, wonderful rest of your day.

Thanks. You too. Thanks for having me.

Bye.

Thank you for listening, joining and being a part of the Money Talk with Tiff podcast this week.

You can check Tiff out every Thursday for a new Money Talk podcast, but if you just can't wait until next week, you can listen to previous podcast episodes@moneytalkwitht.com or follow TIFF on all social media platforms at Money Talk with T. Until next time. Spend wise by spending less than you make. A word to the money wise is always sufficient.