Why You Should Start Exit Planning 24 Months Before a Sale

As noted by Hourglass Legal, selling a business is one of the most important financial decisions an entrepreneur will ever make, and the timing of your preparation can significantly influence the outcome. Beginning your exit planning 24 months before selling your business gives you the strategic advantage needed to increase your business valuation, improve operational efficiency, and attract serious buyers. Rather than rushing the sale process and risking a lower offer, a well-planned, two-year runway ensures you can optimize every aspect of your business for maximum returns.

When business owners rush the process, they often miss key opportunities to improve valuation. A two-year planning window allows you to clearly document systems, refine processes, and address operational weaknesses that buyers typically examine closely. This preparatory phase can dramatically reduce the risk of red flags during due diligence, ensuring smoother negotiations and greater buyer confidence.

Financial performance is another critical factor in determining a company’s value. With 24 months to prepare, owners can implement strategies that boost revenue, increase profitability, and clean up financial statements. Buyers want to see stability and growth, not short-term spikes or inconsistencies. By focusing on strengthening

financial health over two years, you create a track record that supports a higher valuation and positions your business as a secure, attractive investment.

Additionally, exit planning is not only about preparing the business—it’s also about preparing yourself as the owner. With adequate time, you can evaluate your personal goals, understand your post-exit plans, and determine the legacy you want to leave behind. This clarity helps shape your negotiation priorities and ensures the sale aligns with your financial and lifestyle objectives.

A 24-month window also provides time to build a strong management team capable of running the business independently. Buyers prefer companies that are not overly reliant on the owner’s daily involvement. By delegating responsibilities and empowering leadership ahead of the sale, you increase the business’s perceived stability and long-term success potential—two qualities that significantly raise buyer interest.

Ultimately, beginning your business exit strategy two years in advance gives you the leverage to maximize your sale price, reduce risk, strengthen buyer appeal, and transition on your own terms. With thoughtful planning and strategic improvements, you position your business as a high-value asset—helping you secure a smoother sale and a significantly more profitable exit.