Selling a Business: The Challenges
29 December 2025
The world of privately held businesses is experiencing a dramatic shift as a large number of business owners face the inevitable:
“Every business that doesn’t fail will sell…EVERY ONE!”
Whether it’s due to retirement, a desire to sell, or simply stepping away, the transition from founder-led businesses to new leadership can be one of the most emotional and complex decisions an entrepreneur faces. This shift affects not only the owner and their family, but also employees, clients, and vendors – as well as the future direction of the company. The process combines emotional, operational, and financial factors that must be addressed carefully to ensure a successful sale and the ongoing success of the business.
This post discusses some of the challenges business owners face as they transition out of their companies. It highlights the importance of thoughtful preparation 12 to 36 months in advance and how this can help increase enterprise value and redefine what comes next for the business.
The Emotional Landscape
Exit planning is not just about the mechanics of the transition—it’s deeply emotional for many business owners. For founders, their business is often an extension of themselves. It represents years, sometimes decades, of hard work, dedication, and personal sacrifice. The thought of stepping away can provoke a range of emotions, including fear of loss, guilt, and the fear of failure. These emotions are natural and expected given how integral the company is to the owner’s identity.
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One of the most important steps for the owner is to shift their mindset from being the central figure of the company to becoming a strategic visionary. This transition is not easy—it takes time and deliberate action. The business owner must begin detaching emotionally from the daily operations and begin to focus on the larger picture of the company’s future. They need to redefine their role and their purpose within the company, ultimately leading them to embrace the idea of becoming a mentor or advisor rather than the day-to-day decision maker.
Reducing Owner Dependence
In many small and medium-sized businesses, the owner plays a critical role in virtually every aspect of the operation—sales, customer relations, product development, and even the company culture. When it comes time for the owner to step away, this can leave a leadership void that, if not planned for, could threaten the company’s future stability.
Reducing owner dependence is a critical part of exit planning. One way to do this is by building a strong, capable leadership team that can carry the company forward. This often involves developing internal talent who can step into leadership roles. It can also illustrate that the ideal buyer or buyers are, in fact, your employees.
However, it also requires empowering others to take on decision-making authority, which may be uncomfortable for the founder, but is essential for the future health of the business. A culture of decentralization—where decision-making is shared across leadership—helps create an organization that can thrive even when the owner is no longer at the helm.
Another strategy during this period is to bring in interim leadership, such as an interim CEO or COO. These temporary leaders can provide stability during the transition, offering guidance and strategic oversight while mentoring the next generation of leaders within the company.
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Financial Realities
From a financial perspective, exit planning requires careful attention to the valuation of the business, how to preserve its value during the transition, and how to structure deals that meet the owner’s financial goals. Understanding the company’s value is essential to ensuring the transition is successful, especially if the owner intends to sell or pass the business on to family members.
One of the most common mistakes owners make is waiting until the last minute to obtain a professional valuation of the business. By starting the process early, owners can make strategic moves that increase the value of the business before it’s time to sell. For example, eliminating inefficiencies, improving profitability, or divesting under-performing assets can all have a significant positive impact on a business’s valuation.
For family-owned businesses, succession can be even more complicated, as it often involves determining how to divide leadership and ownership among family members. This can be an emotional and contentious process, especially if there’s disagreement about the direction of the company or about how ownership should be distributed. Business owners should address these concerns proactively by establishing clear communication and legal frameworks to prevent conflicts down the road.
Vision and Delegation
A successful leadership transition is often marked by clarity in vision and strategic direction. One of the biggest challenges during succession is ensuring that the company’s vision and values remain intact even after the founder steps down.
Many sellers are as concerned about their legacy as about the value they’ll receive when they sell. To maintain continuity, it’s essential for the founder to document the company’s vision, values, and strategic goals. This documentation serves as a roadmap for the new leadership, helping them understand what made the company successful and how to build on that success. But at the same time, business owners must be mindful of the fact that new owners may want to take the business in a different direction and that the more restriction are placed on new owners, the more difficult the business will be to sell – a condition that will almost always result in a lower value.
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Moreover, delegation plays a key role in this process. The founder should begin delegating authority to key members of the team, empowering them to make decisions. This is often done by providing clear job descriptions, setting performance metrics, and holding regular strategy meetings to ensure everyone is aligned with the company’s goals. Having a seasoned management team in place makes the business much more appealing to institutional buyers such as private equity, search firms and family offices.
Timing
Experts recommend that business owners start planning their exit strategy 18 to 36 months before stepping down. This extended timeline allows them to assess their options, build a strong leadership team, and establish the necessary financial, operational, and emotional structures for a successful transition.
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Don’t Miss Out on the “Silver Tsunami”!
During this period, owners should take several key steps:
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Assess the Leadership Structure: Identify internal candidates for leadership roles, ensuring they are prepared to take over.
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Reduce Personal Involvement: Begin delegating more responsibility to trusted employees, gradually stepping back from day-to-day operations.
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Consult with Advisors: Work with financial, legal, and transition advisors to determine the best strategy for a successful exit—whether that involves selling the company, merging with another entity, or passing it on to the next generation.
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Clarify Strategic Goals: Ensure the company’s long-term strategy aligns with the owner’s vision for the future and communicate this vision clearly to all stakeholders.
What Comes Next?
For many founders, the hardest part of their exit is redefining their personal and professional purpose once they step away from the business. After years of being at the helm, the idea of life beyond the company can be daunting. However, succession provides an opportunity to explore new avenues of personal fulfillment, whether that means retirement, launching a new venture, transitioning into an advisory role or competing with the Big Dog for sailing’s big prize.
Business owners can use this period to engage in personal reflection and goal setting. What kind of legacy do they want to leave? How do they want to stay connected to the business they built, if at all? A well-executed exit plan not only ensures a successful business transition but also gives the owner a sense of clarity about what comes next.
The Bottom Line
Exit planning is a high-stakes process that requires thoughtful attention to emotional, operational, and financial aspects of the business. By starting the planning process early, owners can ensure a smooth transition that reduces dependence on their leadership, clarifies the company’s strategic direction, and positions the business for future success. Planning 12 to 36 months in advance gives owners the opportunity to make the necessary adjustments to the business, helping to maximize its value and secure its long-term success.
Starting early, delegating responsibilities, and involving the right advisors are the keys to making this transition a successful and fulfilling process.
Check out our video series, “How Much is My Business Worth“on our YouTube channel.
“The best way to predict the future is to create it.“
–Peter Drucker
If you have any questions or comments on this topic – or any topic related to business – I’d like to hear from you. Put them in the comments box below. Start the conversation and I’ll get back to you with answers or my own comments. If I get enough on one topic, I’ll address them in a future post or podcast.
I’ll be back with you again next Monday. In the meantime, I hope you have a safe and profitable week.
Joe
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The author is the founder, in 2001, of Worldwide Business Brokers and holds a certification from the International Business Brokers Association (IBBA) as a Certified Business Intermediary (CBI) of which there are fewer than 1,000 in the world. He can be reached at jo*@*******************og.com
