Most business owners think about building their company. Few think about leaving it.
But the truth is, every business will have an exit. Whether it’s a sale, succession, or shutdown, the question becomes: Will you be in control of that outcome — or will life decide for you?
On a recent episode of Accounting in the Wild, I sat down with Herb Cogliano, a Scaling Up business coach and founder of Aspire Growth Advisors, to discuss why exit planning is something owners should start now — not later.
What Is Exit Planning?
Exit planning is the strategic process of preparing your business — and yourself — for an eventual transition out of ownership.
This might mean:
- Selling to a third party
- Passing the business to family or employees
- Or simply winding things down on your own terms
Herb points out that for many owners, up to 80% of their net worth is tied up in one illiquid asset: the business itself. That’s why exit planning isn’t just about retirement — it’s about protecting your wealth and creating flexibility, no matter your age or business size.
The 5 D’s That Can Force an Exit
Herb shared what he calls the 5 D’s — life events that can trigger a forced exit before you’re ready:
- Death
- Disability
- Divorce
- Distress (operational or financial)
- Disagreement (especially between business partners)
These aren’t theoretical. In the accounting world, I myself have even had a ICU stay during tax season for something that happened to me out of the blue (long story, might tell it sometime). Most of us in the accounting world also know of tax pros who literally died at their desks while working on tax returns.
The point: life happens, and it rarely gives advance notice.
Lifestyle Business? This Still Applies
Running a lifestyle business — one built around freedom and flexibility — is a great goal. I run one myself. But even if you never plan to sell or scale dramatically, understanding the risks and preparing for the unexpected still matters.
And for those who do want to grow and eventually exit at maximum value, Herb recommends understanding three specific “gaps.”
The 3 Gaps That Shape Your Exit Strategy
1. Wealth Gap
This is the difference between what you need to live comfortably post-exit and what you currently have (outside your business).
Example: If you need $400,000/year in retirement, and you’re using a 4% drawdown rate, you’ll need $10 million in assets. If you only have $2 million outside the business, your wealth gap is $8 million.
2. Profit Gap
How does your company’s profitability compare to best-in-class performance in your industry? If your operating profit is 10% and the leaders in your niche run at 20%, you have room to improve — and close your profit gap.
3. Value Gap
This is the difference between your company’s current market value and what it could be worth if it were best-in-class.
For example, if companies in your space typically sell at 3x earnings — but top performers sell at 8x — you have a value gap of 5x.
How to Start Exit Planning Today
Exit planning doesn’t have to be overwhelming. Herb recommends starting with a simple question:
What’s your “why”? Why would you want to build a more valuable, more transferable business?
That clarity will fuel the work ahead. Then, take these practical first steps:
- Assess your wealth gap
- Understand your EBITDA (even if you’re a small firm — it matters!)
- Research valuation multiples in your industry
- Start improving transferability by investing in systems, people, and processes
And remember: you don’t have to go it alone. There are experts, tools, and playbooks to guide you — including Herb’s work at Aspire Growth Advisors.
Learn More
▶️ Watch the full podcast episode on YouTube: Watch here
🎧 Listen to the episode on your favorite podcast app by searching Accounting in the Wild
Explore Herb’s free business readiness assessments and resources at: