BIO: Laurie Barkman is a Certified Exit Planner, M&A Advisor, and founder of The Business Transition Sherpa®.

STORY: Laurie explains why it's important to start planning your exit plan five to seven years before and what you need to do during that period.

LEARNING: Don't wait until you're exiting to plan your exit.

"Don't wait to do exit planning when you're exiting, it will be too late. Start five to seven years out. This gives you time to make an impact for change, make the business more attractive and ready, and to also make yourself more ready."

Laurie Barkman

Guest profile

Laurie Barkman is a Certified Exit Planner, M&A Advisor, and founder of The Business Transition Sherpa®. As the former CEO who led a $100 million company through acquisition, she helps business owners build valuable, sellable companies and exit on their terms.

Laurie is the Amazon best-selling author of The Business Transition Handbook: How to Avoid Succession Pitfalls and Create Valuable Exit Options and hosts the award-winning podcast Succession Stories, rated in the top 2.5% of podcasts globally.

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Return visit: what's changed and what hasn't

Three years ago, Laurie joined Andrew on Ep727: Quit Often Quit Fast to share her own worst investment ever. This time, she's back with something arguably more valuable: a masterclass on the single most common mistake business owners make: waiting too long to plan their exit.

"I wish I knew this sooner." That phrase, Laurie says, is the number one thing she hears from business owners who've gone through a transition without proper planning. By the time they're ready to sell, it's already too late to improve the business, attract better buyers, or close the wealth gap they've been quietly ignoring.

If you haven't heard Episode 727, go back and listen to Laurie's personal story. In this episode, she brings that same honesty, this time pointed squarely at what you, as a business owner, need to be doing right now.

Exit planning is not an exit-day activity

The most important insight Laurie delivers in this episode is deceptively simple: exit planning needs to start long before you're planning to exit.

If a prospective client tells her they're thinking about selling their business in one to three years, her response is direct: "You're already behind." A well-structured exit takes five to seven years to execute properly. That's not because the paperwork is complicated. It's because building a more attractive, more valuable, more transferable business takes time. And so does getting you personally ready for what comes after.

Laurie works with two very different kinds of readiness:

Business readiness: Making the business more attractive, more operationally independent, and more valuable to a future buyer.
Personal readiness: Preparing the owner emotionally and financially for the life that comes after the company. Too many founders kick this can down the road, only to find the finish line overwhelming when it finally arrives.

The exit timeline exercise

One of Laurie's most practical tools is what she calls the Exit Timeline Exercise. She sits with clients and literally maps out, year by year, what needs to happen (both in the business and in their personal lives) to set them up for a successful transition.

This isn't a generic checklist. It's built around the owner's specific situation: their age, their family's ages, their life stage, and what they actually want their next chapter to look like.

Understanding the numbers: wealth gap vs. value gap

Laurie walks through two key calculations every business owner should understand:

The wealth gap

This is the difference between what you need for retirement and what you currently have. Many business owners have most of their net worth tied up in their company, which means selling the business isn't just an exit; it's a financial planning event. The net proceeds (after taxes, transaction fees, and other costs) need to be factored into the nest egg calculation. As Laurie reminds us, it's the net number that counts, not the headline price.

The value gap

Once you know your wealth gap, you can figure out what your business needs to be worth—and compare that to what it's actually worth today. The difference is the value gap. Closing that gap is the work of exit planning.

What buyers are actually buying

One of Laurie's most counterintuitive insights: when you're selling your business, stop thinking about your products and services. Start thinking about what problem your company solves for another company.

Buyers, particularly strategic buyers, are acquiring capabilities, not catalogs. They might want your customer list, your talent, your geographic footprint, your intellectual property, or your distribution network. A European acquirer once offered Andrew a revenue multiple (not EBITDA) because he didn't care about the coffee margins. He wanted the distribution infrastructure to pour his own volume through.

That's a strategic buyer making a strategic bet. Understanding who might want to buy you, and why, should shape how you build and present your business years before any transaction.

Transferable assets: do an inventory now

One of the most actionable practices Laurie recommends is a transferable assets audit. Go through every major asset in your business (contracts, customer relationships, intellectual property, talent, equipment) and rate each on a scale of 1 to 5 for how transferable it is to a new owner.

A score of 1 isn't a crisis. It's a to-do item—one you can now address if you start the process early enough.

A common example: contracts that aren't transferable. Many business owners have never thought about whether their agreements include a transferability clause. Without one, a sale can be significantly complicated. With a transferability clause added proactively at renewal, the problem simply goes away.

Keep your financial records in order

Another practical piece of advice comes from Andrew's observations of businesses in Thailand, echoed by Laurie's US experience: messy financial records are a serious exit liability.

Buyers expect the last three full years of clean financials, current year data, and a credible forecast. If your monthly books aren't closed, your expense categories are inconsistent across years, or your numbers are tied up with personal expenses, you've created friction in the due diligence process. This friction costs you time, trust, and money.

Laurie recommends moving toward reviewed financials as an early milestone. For many businesses, it's not a high incremental cost, and it signals credibility to buyers.

Lessons learned

Don't wait to plan your exit until you're ready to exit. By that point, it's already too late to make meaningful improvements to the business. Start five to seven years out.
Personal readiness matters as much as business readiness. Too many owners focus entirely on the company and are blindsided by the emotional and lifestyle changes that come with stepping back.
Know your wealth gap and your value gap. These two numbers are the foundation of any honest exit plan.
Buyers buy on their timeline, not yours. When someone comes calling, they're ready. You may not be. The goal of exit planning is to close that readiness gap before the call comes.
Recurring revenue commands a premium, but know the difference between recurring and reoccurring. Contracted, predictable cash flows are what buyers pay top dollar for.
Take an inventory of your transferable assets. Find the gaps now, while you still have time to close them.
Clean, consistent financial records are non-negotiable. Start with reviewed financials and build from there.

Andrew's takeaways

Profitability and growth are both required. Profitability without growth isn't particularly valuable, and growth without profitability doesn't justify the premium either. It's the combination that drives multiple expansion.
The $25 million revenue threshold is a real inflection point in buyer perception. Businesses that cross it are seen as market-proven in a way that smaller companies, however promising, simply aren't.
When a strategic buyer sets a revenue multiple, they may...