Run Your Business Like You’ll Sell It: Why Succession Planning Starts Now

Jan 29, 2025

Every business owner will exit their business one day—on their terms or someone else’s. Whether it’s passing leadership to the next generation, selling to maximize value, or stepping away entirely, the time to plan for that transition isn’t at the last minute. It’s now.

Succession Planning is More Than Just an Exit Strategy

Succession planning isn’t just about preparing for retirement. It’s a strategy for building a business that runs efficiently, scales effectively, and is attractive to buyers or successors. A well-prepared business isn’t just easier to transition—it operates better today.

Too often, succession planning gets delayed because it feels like a distant concern. But waiting until a transition is imminent limits options and stresses the process unnecessarily. Early planning makes for a smoother exit and a strongerfinancial outcome.

As ProCFO Partners CEO Nelson Tepfer puts it, “Every business owner exits their business one way or another. The only choice is whether it’s on your terms or not.”

The Key to a Successful Exit: Financial and Operational Readiness

A business that’s ready for succession or sale has strong financials, efficient systems, and clear processes. Buyers and successors look for businesses with:

• Transparent financial records – Organized, well-documented reporting that clearly shows profitability and cash flow.
• Scalable operations – Efficient workflows and systems that don’t depend on a single person, especially the owner.
• Consistent profitability – A sustainable revenue and growth track record backed by financial data.
• Defined leadership structure – A team that can run the business independently, ensuring continuity after the transition.

Without these elements, attracting serious buyers can be difficult, and you may end up selling under less favorable terms.

The CFO’s Role in Maximizing Business Value

We’ve discussed before how a strategic CFO builds the financial foundation that allows a business to grow, scale, and eventually transition successfully. With a CFO’s guidance, you can:

• Improve financial reporting so valuation discussions are based on clear, accurate data.
• Identify inefficiencies that may lower profitability and fix them before a sale.
• Strengthen cash flow management to reduce risk for buyers or successors.
• Create a structured transition plan for financing, leadership, and operational continuity.

A well-prepared financial structure isn’t just about making a business easier to sell—it’s about running a more successful business today.

Succession vs. Selling: What’s Different?

Selling to an external buyer and transitioning leadership to a successor require different approaches, but both demand strategic planning.

• Selling the Business – External buyers go through rigorous due diligence. They analyze financials, operations, and risk factors before making an offer. If records are incomplete or systems are disorganized, it can lead to lower offers or lost deals.
• Passing the Business to a Successor – Whether transitioning to family or internal leadership, the business must be structured to run independently. This includes financial planning for ownership transfers, leadership training, and clear decision-making authority.

In either case, the transition is far more complex and potentially costly without strong financial oversight.

Common Mistakes That Undermine a Business Exit

Many business owners unknowingly reduce the value of their business—or make a sale unnecessarily complicated—by failing to prepare in advance. Some of the most common mistakes include:

• Over-reliance on the owner – If the business can’t function without you, it’s a liability, not an asset.
• Poor financial organization – A lack of clear reporting or reliance on tax returns alone can lower valuations.
• Last-minute scrambling – Without a transition plan in place, deals often fall apart or result in unfavorable terms.
• Ignoring operational improvements – Buyers look for businesses with efficient systems and documented processes.

Start Now for a Stronger Next

Instead of thinking of succession planning as “leaving”, think of it as creating a stronger, more sustainable business. A business that’s prepared for transition is also one that operates more effectively, attracts better talent, and remains financially healthy.

As Tepfer explains, “We always want people thinking about what an exit looks like for them, whether it’s a year, two years, or ten years away.” The earlier you start, the more control you have over the outcome.

Whether planning to sell, transition leadership, or build a more resilient business, taking action now ensures that when the time comes, you’ll be ready. The choice isn’t whether you’ll exit—it’s how you’ll exit.