By Elliot Conway
Quiet Pride and the Unseen Future
When I speak with owners of what we call Backbone Businesses - those critical, foundational companies that operate in physical, legacy sectors - there is always a deep and obvious pride in what they’ve built. In the majority of cases, they grew their businesses organically - often at great financial risk or uncertainty. They never once needed to rely exclusively on outside investors.
Most never took the time required to properly define an “exit strategy”. After all, they’ve had more pressing things to worry about: building something truly valuable, taking care of their employees, and satisfying their customers.
But if we step back, there’s a truth that eventually catches up with every entrepreneur: at some point, they will no longer be at the helm.
Whether that moment arrives through retirement, a new opportunity, health changes, or a simple desire for less day-to-day involvement, it’s vital that they - and the people counting on them - aren’t blindsided.
An exit plan is a way of caring and preparing for the future: a forward-looking blueprint that lets them decide how, when, and under what terms they’ll hand over or scale back their role.
Why It’s Important to Always Have an Exit Plan
Preserving Value
Founders have poured their heart and soul into building a business of value. Think of the many years and countless hours devoted to the enterprise. The financial worth is real, but so is the personal worth - the relationships, the reputation, the trust that’s been built. An exit plan ensures that value doesn’t evaporate if they suddenly can’t (or don’t want to) run the business day in and day out. Instead, it acts like a safety net, allowing them and their loved ones to harvest the fruits of their labour on their terms.
Guiding Decision-Making in Real Time
It might sound counterintuitive, but planning an eventual exit can shape today’s decisions for the better. When founders appreciate that they might one day pass along the company or bring in new leadership, they are more effective at documenting processes, cleaning up financials, and investing in people who can manage effectively without them. Those steps not only make the business more valuable after they do leave - they also make the current operations stronger.
Mitigating Personal Risk and Stress Business ownership is tough enough without the added anxiety of “What if I can’t keep this up forever?” Having a roadmap for how they’d step away - whether gradually or all at once - provides a sense of calm. It reduces the worry that the owners will be cornered into a fire sale or forced to close up shop unwillingly. An exit plan is like an insurance policy for peace of mind.
Respecting Legacy and Community If the business is a cornerstone in its region or industry, the decisions made by its owners will have an impact on more than their personal finances. By laying out a thoughtful succession or ownership transition, they affirm the responsibility they feel toward employees, customers, and the wider community by effectively saying: “we care enough about what we’ve built together to ensure it endures, even if we’re not here every morning to open the doors.”
Responsibility at the Heart of It All
There’s a word that keeps coming up in all these conversations: responsibility. It’s about caring for something greater than ourselves and ensuring the business endures beyond our direct involvement. An exit plan isn’t merely a financial or legal tool, it’s a reflection of our responsibility to pass on what we’ve built in a sustainable and thoughtful way.
Looking Out for Employees Many owners pride themselves on never missing a payroll, on offering stability to families who count on their salaries. If they exit abruptly with no plan, they risk jeopardising that stability. A defined strategy ensures their people aren’t left adrift.
Protecting Vendors and Customers Loyal suppliers who’ve extended credit or customers who rely on consistent service form part of the ecosystem they’ve nurtured. A sudden change can disrupt those relationships. By communicating the timeline and transition plans, everyone remains on stable ground.
Honouring Family and Future Generations If the owners have a family, they likely want them to benefit from their efforts - or at least not suffer from a chaotic handover. Setting up trusts, agreements, or other wealth-transfer tools can preserve both harmony and clarity.
The Emotional Side of Exiting
It’s one thing to talk about exit plans in a purely logical sense - valuations, contracts, deal structures. It’s another to face the emotional reality of stepping away from something that’s been part of the entrepreneur’s whole identity. Very few founders can flip that switch without feeling a pang of loss or uncertainty. A good plan acknowledges the human side:
Taking Time to Reflect Before making any moves, owners should spend time asking themselves what they really want for their future. More travel? More time with children or grandchildren? Starting a new venture or non-profit? Clarity on these personal goals will guide how they shape their exit.
Communicating with Openness Whether it’s family members, senior leadership team, or all-hands meetings, transparent communication prevents confusion and rumours. It also gives people a chance to express concerns and ask questions.
Allowing a Gradual Shift If they’re not ready for a clean break, they should consider phasing out certain responsibilities over a couple of years. This not only helps them adjust but gives their successors time to learn the ropes.
Common Pitfalls (and How to Avoid Them)
Ignoring the Topic Until Crisis Strikes
Proactive planning is always cheaper and more flexible than a last-minute scramble. By starting early, they can maintain control rather than letting external events (health, market shifts, divorce) dictate their exit.
Overlooking the Necessity of Clean Financials
Keeping tidy records, separating personal expenses, and understanding key metrics are essential. Even a buyer with the best intentions will need clarity on where money flows and how risk is managed.
Underestimating the Value of Culture
Culture is often a backbone business’s strongest asset. If entrepreneurs fail to document or discuss “how we do things”, that culture is at risk of erosion when they come to leave. Transitioning leaders deserve a guiding manual - formal or informal - about what made the company special.
Lack of Trusted Advisors
Legal, tax, and financial professionals with experience in M&A or succession planning can save them a heartache (and a fortune!) Engaging the right support team early in the process makes the world of difference.
A Final Word on Legacy
Ultimately, an exit plan is about legacy - about ensuring that a life’s work serves not only the needs of the person or people who were directly responsible for the success, but also those who believed in them, bought their products, clocked in every day, and grew alongside and helped implement their vision.
By mapping out how and when to step back or step away, entrepreneurs are respecting everything they’ve built, giving it the best chance to remain a positive force for generations to come.
In many ways, the business they leave behind reflects what they valued all along: responsibility, relationships, stewardship, and resilience. They brought this enterprise to life, nurtured it through tough times, and seen it flourish in good times. Surely, it’s worth ensuring it continues to thrive, even after they shift into a new phase of life.
That’s why it matters for entrepreneurs to always have an exit plan - not to hasten their departure, but to guarantee their dedication carries forward in the most thoughtful and beneficial way possible.
For more on what to do next, you can read our guide on exit strategy options here or get in touch with us today if you'd like to discuss with our team.
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