175: Before You Talk to Buyers: Why Most Business Exits Fail Before They Start (Exit Series · Part 1 of 3)

Clarity, Timing, and Risk—What Business Owners Must Understand Before Engaging Buyers or Private Equity

Clarity—not urgency—is what determines whether an exit actually works

About the Exit Series

This Exit Series is designed for owners of established, growing businesses who want options—whether they plan to sell soon or not. If your business depends on you, lacks clarity on succession, or hasn’t been built with an eventual transition in mind, this conversation applies right now.

Before a business owner ever talks to a buyer, something far more important has to happen first: clarity.

In this episode of Grow With Purpose, I sat down with Senior Business Advisor Cameron Earhart to kick off a three-part Exit Series focused on helping business owners think clearly—before momentum, pressure, or big numbers start driving decisions.

With private equity interest at an all-time high, many owners are getting inbound calls, emails, and messages weekly. Multiples get mentioned. Excitement builds quickly. And without preparation, it’s easy to mistake activity for readiness.

That’s where most exits begin to unravel.

Why So Many Exits Go Sideways Early

Most failures happen long before due diligence

When people talk about failed exits, they usually point to due diligence.

But the truth is, most deals fall apart before owners ever reach that stage.

It’s not because the business lacks potential. It’s because owners step into conversations without:

• A clear understanding of their options

• Alignment on why they want to exit

• Awareness of how buyers evaluate risk

Once a buyer is engaged, momentum favors speed. And when clarity isn’t established ahead of time, the process can feel like a runaway train—one that’s difficult to slow down without cost.

“I Want to Sell My Business” Rarely Means One Thing

Understanding the motivation behind the statement

When an owner says, “I’m ready to sell,” it can mean very different things:

• Burnout and exhaustion

• Desire for financial security

• Interest in protecting a legacy

• Lack of succession planning

• Opportunity to scale with the right partner

Selling to a third party is only one path—and even within that path, the type of buyer matters.

• Strategic buyers may want the owner fully out on day one

• Financial buyers, like private equity, often need the owner to stay involved for several years

• Other paths—internal transitions, recapitalizations, ESOPs, or minority investments—may align better with what the owner actually wants

Until the why is clear, the how will always feel complicated.

What Buyers Actually Underwrite

Revenue gets attention—risk drives valuation

Buyers don’t just evaluate upside. They evaluate risk.

Even strong revenue and healthy margins won’t protect valuation if risk is unresolved:

• Owner dependency

• Customer or contract concentration

• Expiring approvals or long sales cycles

• Key employees nearing retirement

• Weak or unclear financial reporting

“Risk decreases valuation.”
— Cameron Earhart

A helpful exercise before ever going to market is this: If I were buying this business, what would make me hesitate?

Reducing those risks ahead of time doesn’t just improve exit outcomes—it strengthens the business today.

Owner Dependency and Value

Why independence matters to every buyer

The more dependent a business is on its owner, the more risk a buyer assumes.

Strategic buyers want systems, teams, and processes they can rely on without the founder. Financial buyers may tolerate owner involvement—but only with structure, contracts, and safeguards in place.

In every case, owner dependency compresses value.

The businesses that command the strongest valuations can operate—and grow—without the owner’s daily involvement.

Timing Reality: This Is Not a Fast Process

Preparation almost always takes longer than expected

Even for healthy businesses, realistic expectations matter:

• 9–12 months from market to close is common

• Significant preparation is often required before going to market

If you’re two to five years away, that’s not too early—it’s ideal.

Good exit planning isn’t about selling tomorrow. 

“Exit planning is just good business strategy.”
— Cameron Earhart

It’s about building a business that gives you options.

A Better Way to Define the Exit Goal

Why value matters more than a date

One of the most common mistakes owners make is anchoring to a timeline:
“I want to sell in five years.”

A healthier framing is this:
What outcome do I actually need this business to yield?

When owners define a value goal instead of a date, decisions become clearer. Preparation becomes measurable. And exits become intentional instead of reactive.

Questions for Business Owners

Pause here before any buyer conversation

• Why do I really want to exit?

• Which outcome matters most—money, freedom, legacy, or growth?

• Which exit paths actually align with that outcome?

• Where is my business still dependent on me?

• What risks would concern a buyer today?

Clarity on these questions changes everything that follows.

Key Takeaways

What matters most to remember from this conversation

• Most business exits fail before due diligence ever begins.
  Deals usually don’t fall apart because of bad numbers—they fail because owners enter conversations without clarity on their goals, options, or readiness.

• “I want to sell my business” is rarely the real issue.
  Burnout, legacy concerns, growth limitations, or financial security are often the true drivers. Until the why is clear, the exit path will remain misaligned.

• Buyers underwrite risk more than revenue.
  Strong sales alone don’t protect valuation. Owner dependency, customer concentration, expiring contracts, and weak systems all compress value.

• Owner independence is one of the strongest value drivers.
  The more a business can operate without the owner’s daily involvement, the more attractive—and transferable—it becomes to any type of buyer.

• Good exit planning improves the business whether you sell or not.
  Clarifying leadership, systems, financials, and risk doesn’t just prepare for an exit—it creates a healthier, more valuable business today.

What’s Next in the Exit Series

Part 2 of this series dives into the numbers—how buyers analyze financials, where deals commonly break during diligence, and what owners can do now to protect valuation.

Whether you plan to sell or not, this work makes the business stronger.

Good exit planning is just good business planning.

References and Downloadable Resources 

• John Warrillow - Built to Sell
  Context: A practical book on building a business that doesn’t depend on the owner

• Michael E. Gerber - The E-Myth Revisited
  Context: A foundational perspective on building systems-driven businesses

• Episode 175 - Leadership Guide
  A guide to exit readiness through leadership clarity