When business owners hear the words “exit planning,” many think it’s not relevant – yet. “I don’t want to sell for another 3–5 years,” they say, “so why should I think about it now?”
In this episode of the Exit Insights podcast, host Darryl Bates-Brownsword and Kevin Harrington break down why that thinking is not only flawed – but potentially costly.
They explain how exit planning isn’t just about preparing for sale. It’s about creating a business that’s well-run, more valuable, and far less stressful to manage. And if you’re the key decision-maker in your business, that’s even more important.
???? If people are coming to you for all the answers, your business isn’t ready to run without you – let alone be sold.
Many owners put off the work because they think growth means chasing revenue. But as Darryl and Kevin explain, true value is built by eliminating owner dependence, developing a strong team, and focusing on business valuation rather than just turnover.
They also talk about unplanned exits – when a buyer comes knocking unexpectedly – and how not being ready can cost you more than you realise.
It’s not about rushing out the door. It’s about making sure the business can run without you – so you can choose if or when you want to go.
???? Show Notes:
In this episode, you’ll learn:
- Why “I’m not ready to sell” is the wrong reason to delay exit planning
- How owner dependence drags down your business valuation
- What makes a business “exitable” – and why that matters even if you stay
- How strategic planning reduces stress and creates sustainable growth
- The dangers of chasing revenue instead of building value
- How to prepare for an unexpected offer – without the panic
- The role of culture change in creating a business that thrives without you
- Why some owners fall back in love with their business after exit planning
Actionable Tips:
- Identify whether you still have a “day job” in your business – start handing it over.
- Get your governance, contracts and documentation in order.
- Analyse product and customer profitability – not just top-line sales.
- Work 6–12 months ahead, not just in the day-to-day.
- Build a culture of accountability and ownership in your team.
Getting your business exit-ready isn’t about leaving – it’s about creating a better business while you’re still in it.
Transcript
Darryl Bates-Brownsword (00:07)
Welcome to the podcast that’s dedicated to helping business owners prepare for an exit so you can then maximize the valuation of your business and exit on your terms. This is the Exit Insights podcast. I’m Darryl Bates-Brownsword and I’m joined by Kevin Harrington. Welcome, Kevin. Great to see you again today.
Kevin Harrington (00:24)
Hi, Darryl. And yeah, it’s that time again, another Exit Insights podcast. How many of these have we done so far?
Darryl Bates-Brownsword (00:31)
Close to 200. Last time I checked, it’s just under 200 episodes in total. And that includes all the early ones where we were a bit clunky and not as consistent weekly.
Kevin Harrington (00:44)
Do mean we’ve been improving? Fantastic.
Darryl Bates-Brownsword (00:48)
Well, we’re always learning, Kevin, as you know. Now today, what a listener is going to take away from today’s conversation. We thought that, you know, one of the things is that always come up whenever we’re talking to business owners who are thinking about exiting their business one day, sometime, some point in the future is why the heck should I start preparing my business today? What’s the point? Like, I don’t want to sell my business for three years, five years.
There’s so much things I’ve got to get done first rather than prepare it for exit. What does that even mean? What’s in it for me? I’m not feeling any downside of not having my business prepared. So why should I do it now? So let’s get in and dig into that hot potato, shall we?
Kevin Harrington (01:30)
there’s so many different angles to attack this one as well. But I guess, you know, what we’re talking about today, if that’s our topic, we’re talking about why people might not choose to get involved with getting their businesses exit ready. This, this subject matter would equally apply to businesses that have their own sales machine going on where
customers go, yeah, that’s great, that’s really interesting, I’ll get back to you, or leave it with me and that sort of thing. So this will be interesting for people in more than one direction, but let’s focus on our exit planning services.
Darryl Bates-Brownsword (02:03)
Yeah.
And I think, I think you’ve just touched on something that there’s something in the label exit planning. I don’t want to exit yet. So I don’t need to have my business ready for exit because I don’t want to exit. And so what does it mean to have my business exit ready? And I think, you know, well, we can go, let’s have look at the psychology of why people buy or why people were motivated to do anything at any time. And it’s cause they’re either running from something or running to something. They’ve got some sort of pain. They’ve got some sort of.
problem that they need to address by not having their business exitable or exit ready at the moment. And they’re not feeling that pain. They’re not feeling the frustration of not working or not having that high evaluation because no one’s banging on their door offering to purchase their business at a lower valuation. So I think there’s the crux of it. There’s no immediate, tangible, visible need.
that they’re experiencing or having frustration from today, three to five years down the track or before the event, three years before the event, they’re not feeling any downside just yet. They will in three years time, if they keep going and doing what they’ve always done and don’t make any changes, they’ll be feeling it then, but today they’re not feeling any symptoms.
Kevin Harrington (03:24)
Yeah, so let’s address that one straight away.
If someone said, I have no problem at the moment, it’s three years down the road before I want to exit my business. And if we said to them, are you struggling getting your staff to do all the jobs you need doing? Do you find yourself being the centre stage for everything that goes on in your business? And the answer is yes, on any level. It means the business is owner dependent. And if you want to sell a business that is
owner dependent, the valuation will be materially lower, because you’re going to exit the business and how does the business maintain its strong relationships with customers and suppliers and so forth. So actually, this very first one, if people want to kick the can down the road on planning their exit, but they’re owner dependent and they’re stage central in their business, it’s going to take a year or two to change that.
to get teams, leadership teams up and running, to get the staff feeling like they’re a team with almost like an owner, ownership mindset, where they’re doing all the right things and want to be involved. That takes time to do. So the truth here is that to get your business match fit, you can’t wave a magic wand, some things do take time. And it’s worth having a chat around what exactly what those things are, but
Darryl Bates-Brownsword (04:35)
Yeah.
Kevin Harrington (04:49)
Only dependence is a big component part of that.
Darryl Bates-Brownsword (04:52)
Yeah.
And we’re talking about businesses in that two to 50 mil revenue bracket. We’re not talking about businesses that are half a mil in revenue and are owner dependent. Of course they are. Yeah. That’s a business, know, even a one million pound business is typically a business with an owner or two and a number of helpers. Everything revolves around them. We’re not talking about those businesses today. We’re talking about the ones that are sort of two to 50 million revenue.
where they’ve got a leadership team in place, they’ve got some managers in place, they’ve got a structure in their business, well, hopefully they’ve got a structure in their business, and they’re the businesses where we can really have a significant impact on eliminating that owner dependence and starting that journey towards creating that maximum valuation. So I think the first big question you wanna ask yourself is, do you have a day job in the business? What do I mean by that is,
Do you have any sort of functional responsibility? Are you head of sales? Are you head of delivery? Are you operations involved? Do people come to you every day to help with decisions? Are you involved in day-to-day operations in any way, form of the business? Or does the business run day-to-day without your input? That’s what you’re looking for. No day-to-day or functional responsibilities or key person responsibilities.
in the business. don’t want people to be going, hey, look, we had this problem a few years ago and coming to you as the owner and going, how should we solve this? What did we do last time? Who was that person you knew that helped us out and solve this problem last time? If people are coming to you because all the information’s in your head, there’s a massive red flag.
Kevin Harrington (06:34)
Yeah, we dealt with that in detail on last week’s podcast. So if people look us up on their preferred podcast provider, it’ll be the previous episode to this one. But it’s a big subject. And we spent a lot of time talking about that last time. But yes, if you’re working in the business, you’ve got a job role in the business, you need to get out of it to increase the value of the business. And you can’t wave the magic wand, it takes time. So
You are costing yourself money if you kick the can down the road and don’t deal with it if you want to exit your business on the best terms you can.
Darryl Bates-Brownsword (07:04)
Yep.
So we’re talking about what do we have to do to create that culture in the business so that you, why do you want to start three years before any intended exit? And I think an easy one for us to tick off is, hey, what if you’ve got your business, you’re in that three, five, 20 million pound revenue, you have no intention to exit, but someone comes and taps you and sort of says, hey, look, I’m interested in acquiring your business.
If we can put a deal together, would you be interested? Now I’ve met a number of business owners who say to me, Darryl, the business is always for sale if someone offers the right price. And I go, great, what’s the right price? And then they flounder because they’ve never really thought that through. So let’s think it through. What’s the right price for you and your business if someone were to come and offer you that price that you would consider it and you’d want to move forward. Now,
In that case, that’s an unplanned exit. It’s not due to death or you’re being hit by a bus or anything. It’s an unplanned exit because you didn’t go to market to try and attract officers. Someone came unsolicited. Now, when they do, they’re going to want to have a look at your business. They want to see that your management team’s capable and running without you. They want to see that your systems are in place and that your business operations are efficient as possible.
And any opportunities that they uncover, they’re not going to tell you. They’re going to keep them under their sleeve and go, OK, well, there’s an opportunity for us. The current owners haven’t taken advantage or haven’t exploited that or made the most of that opportunity. That’s one for us. There’s a bit of added value for us up our sleeve. But what they’re to make sure is they want to have a look at your business and they want to know that whatever’s there now in revenue,
is not going to decay under a change of ownership. They want to make sure that once you leave, that the business doesn’t require you to make sure that that revenue is there. there’s one of the big things, red flags, if you like, of going, we need to be ready for an unplanned exit. We need to make sure that all of our reporting, all of our governance, all of our
You board minutes, our compliance, our regulation, all of our paperwork, all of our contracts, all of our record keeping is up to scratch. And I know where to find it. All my employee contracts, all my terms and conditions, my supplier contracts, where are they? Are they all filed neatly and can I find them? Are the board minutes up to date? I’ve mentioned those. What about my structure, my organization chart and everyone’s job description? So they all up to date. Are people actually working to their job descriptions?
Or are they out of date job descriptions that, you know, from when they were first appointed to the business and they’ve never been updated? What about the work processes that they follow to complete their tasks? You know, classic old policy and procedure manual. Are those up to date or are they just written once and forgotten just for a process of, you know, that was a project of the month, you years ago and are now obsolete and out of date? Have your systems, your IT platforms
changed since you wrote your procedures and your workflow processes, making them out of date. So all the information you have in your business needs to be accurate, up to date and used and known by everyone in the business. There’s a couple of things to add to there, Kevin.
Kevin Harrington (10:33)
Yeah, so these are interesting things to focus on that you don’t quite know what’s going to be happening. you know, someone could come and knock on your door, you’re quite right. And it has to be added there that it’s very rare that the person that comes and knocks on your door and offers you a price is going to offer you the best price. And so you probably want to, in that situation, try and get one or two more people interested and
again, you need to have everything ready, everything ship shaped so that you can present it correctly. So and so that those potential purchases can run the numbers without you being there and work out what it’s worth to them. So there’s lots lots of reasons why people must get started now on exiting a business is basically about having a well run business, which is more profitable and more fun anyway. But I think there are other reasons Darryl that
that people kick this down the road. It’s sometimes it’s because it’s just not what their estate center and their thinking of, you know, how do they work, you so many people are superb at their profession and their trade skill. They started the business and they’ve grown it and that’s, they know that better than anyone else, better than their competition and their market leaders or whatever they might be. And then you start talking about
strategy and multipliers and exit planning and so forth. And it just wasn’t why they went out to start a business in the first place. And you sometimes it’s no interest to them. Sometimes they just genuinely don’t understand it because why should they because they’re really good at something else. And I think sometimes we’re not demonstrating the value that a business like ours can add. Not to the point where they go, haha, yeah, I get it.
Darryl Bates-Brownsword (12:14)
Thank
you.
Kevin Harrington (12:15)
And so sometimes it’s entirely our fault and I guess that’s something worth exploring.
Darryl Bates-Brownsword (12:20)
For sure. Yeah, I can think of many times where I’ve had a conversation with a business owner who’s, you know, they’re great on the tools. They’re involved in the business. They actually say things like, hey, when the business needs me, I feel valued. I feel important. I feel like when I’ve got all the answers to the questions, I feel like I’m adding value to the business. And that’s what I was talking about earlier about you’re in an operational role. Now,
operations, well, that’s talking about day to day revenue. And if you’re all you’re doing is looking at day to day revenue with with six to 12 months time frame, you’re not building the business. You haven’t got the mind headspace to to be looking at where the business is going to be in three years time. But you may do that annual planning and business planning days. But are you looking at that week in, week out, month in, month out, thinking six to 12 months ahead of your business?
Because when you get yourself out of that operational role and the adrenaline rush of solving problems day to day, and you pull yourself out of that and you’re working six to 12 months ahead of the business on projects that don’t delay your daily input, then A, you’ve learned a whole new job. So you’ve moved out of the career boredom, but you’re now thinking and working on projects that are going to be bringing revenue in in two to three years.
or in a shorter year, maybe one or two years. But that sort of thinking and that sort of strategy is what grows the business and gives it those big steps in growth and ensures the sustainability and the survival of your business to make sure that you’re really growing and keeping ahead rather than just surviving and just treading water, fighting fires, trying to keep up all the time. It really takes the pressure off when you’re working six to 12 months ahead of the business.
And it really gives you that focus of what you need to do and that calm head space to solve some of the bigger problems for the future of the business.
Kevin Harrington (14:18)
Yes, I sort of liken this to going on that road trip and you you’re determined to get, I where are we? in the south of England. And let’s imagine we’re off on our road trip to get to the north of Scotland. If we want to get to the north of Scotland, we probably ought to work out where the north of Scotland is and double check it’s where we want to be. Some people set out plans and when they get there, it wasn’t really what they wanted. So north of Scotland, that’s where we want to be.
And how’s that going to go if we don’t have a compass, a sat nav, whatever, that tells us where we are and odometer that tells us how many miles we’ve gone. So currently our plan is, okay, we want to get to the north of Scotland and do you know what, my objective is to get to the next corner. And each time you get to the next corner, you…
take the road that appears the easiest, the most sensible, probably the right direction, where on earth are you going to end up? Pretty much nowhere but the north of Scotland, I would imagine. And that’s the issue we’re talking about here. It’s if you want to achieve something, you have to know where it is, you have to double check it’s what you want. And you have to find a way of navigating to it.
Darryl Bates-Brownsword (15:27)
you.
Kevin Harrington (15:33)
You know, the car’s going to need a service while on the way if you’re going to take two, three years doing it. And all those things, you need to have a proper plan. Now you’ve had a proper plan on getting your business started. You’ve got a proper plan on looking after your customers. How about spending some time on a proper plan to look after you and your interests? Oddly, when we do this with people, they end up looking after their customers better because the staff are more focused.
the policies and procedures and methods of working are tracked in such a way that the ball doesn’t get dropped. You’re not having to firefight so much. So everyone’s a winner, but you’re still going to get to the north of Scotland, which is where you want to be.
Darryl Bates-Brownsword (16:15)
Yeah. And, and when you’re looking that far ahead, you’re going to be identifying roadblocks that are in the way and you can navigate around them efficiently and effectively rather than just going, you know, running into it and going, I didn’t see that. Now what do I do when you hit a roadblock and you didn’t see it come? And that’s quite stressful. And, no one makes the best decisions when they’re stressed. So, yeah, there there’s another reason to be working.
Yeah, what does Gov call it working on the business? We call it working in the black, you know, the black representing the strategy, the blue representing operations and the red representing business support and back office type of functions and activities there. Another one of the big ones that we hear a lot is I’m not ready yet. I don’t want to sell the business for two or three years yet. And I’m not ready because
You know, the business size, I just need to increase the revenue of the business to get it to the size of where I want it to be before I exit it. So I’ve just got to do this. I just need to do these other things first.
And it sounds logical on paper and it sounds logical at the time, but why would you want a business that’s exit ready? And you go, if you look at the end of the process, a business that’s ready that – or is sellable, might be a better language for it, or exitable, is a business that’s running like a Swiss watch. It’s a business that is more profitable, is more efficient.
You haven’t got the people running around being stressed all the time. So you’ve got your time and your focus back. So that means you, if you’ve got a more profitable business and you start looking at the things that can increase the valuation above and beyond, let’s call it your industry norm or your industry standard, and you build a strategic based business, you can increase the valuation of your business without necessarily increasing the revenue.
So a lot of people come from the mindset of, the business isn’t big enough yet because I haven’t got enough profit and the standard industry multiplier for my industry is X. But if they started looking at building the intangible assets and getting the, eliminating that owner dependence, then they can start doing things that will increase the multiplier of the business. And that’ll have a much greater effect on, on amplifying the valuation of your business. And you’ll get there a whole lot quicker.
by changing the way you’re doing things and by stepping back and approaching things from that step back rather than in the thick of it in the middle. You can’t see the wood for the trees type of effect, I think.
Kevin Harrington (18:47)
Yeah, and to extend on what you’re saying there, people saying I want to get the profit, what they generally start doing is finding good ways of increasing revenue, increasing the turnover, increasing the headline sales.
Darryl Bates-Brownsword (19:00)
Yeah.
Kevin Harrington (19:01)
And then they think about the profit afterwards. And if they have time to do so, that is and quite often, people can end up hampering their profit margin for the benefit of getting increased headline sales and working harder for not much more gain. If you want to exit your business, your revenue is not the start point that someone’s going to look at. They’re going to look at the profitability. How much money does the business earn?
And that’s in the profit. And if you set about increasing the asset value of your business, which is what we do with clients, that’s about increasing the profit and increasing the multiplier, increases the value of the business. It really doesn’t matter if the revenue doesn’t increase, if you can get the profit to increase enough. So here’s another reason for getting engaged in this mentality of planning ahead, rather than just
Darryl Bates-Brownsword (19:49)
Hmm.
Kevin Harrington (19:56)
doing what you’ve always done, but trying to sell more to people and being very kind of transactional for the sake of revenue.
Darryl Bates-Brownsword (20:02)
So if you’re a business owner and you can extract yourself out of the day job, then you’re going to have time to think about this and you can have a look at some of the products that you sell and you can start to do some analysis of which products are more profitable, which products are costing me. Are there any products that I’ve got that the time and effort that I’m putting into them, I’m just not making enough margin on them to be viable and they’re costing me. And which customer segments are…
generating the most profit, know, customers that come through the website, customers that come through introductions or referrals or customers in the West or the North or the customers that buy this product, which ones, if you can start to do some analysis on your business, which you just can’t do when you’re in the thick of the operations because you’re operationally required, you won’t be able to see how you can add value to the business. Now you might see an opportunity, well, at this
product is more profitable for us and this market sector is more profitable for us, then we can focus on our marketing to do more work there. But otherwise, if you’re just in the operations, you’re just doing more of the same, more of the same, trying to push everyone harder. And the only way you’re going to grow is by working longer hours. And that just results in getting more stress.
Kevin Harrington (21:18)
It’s funny how you get distracted sometimes isn’t it? A message just pinged up on my screen from someone talking about a university course they want to go on. And it suddenly made me think about what we’re talking about. If you want to get the valuable degree, which shows how clever you are, and you can learn lots of stuff, you don’t just do it when you want to do it, you do it now to get the value as soon as you can. And it takes three years to get your degree. And you start now.
Darryl Bates-Brownsword (21:42)
Yeah, that’s an interesting correlation.
Kevin Harrington (21:44)
Incrementally, you gain the knowledge, you become a better person on the subject, you become more inquisitive, you become all sorts of things you get for the benefit of taking a university degree. At the end of it, you’re more valuable. You’re more valuable to an employer and so on. This is the same thing as what we’re talking about is you’re at every step down that route, you will be adding more value to your business and it’s easy putting off getting a great education.
I’m too busy. I can’t do that now for whatever reason, even if it’s open university. And it’s kind of a fear of the unknown as well, isn’t it? Can I? Yeah, well, yeah, it’s changing. Can I? What’s the what’s it going to look like? What am I going to have to do? Is that going to be beyond me? Am I going to look silly or whatever? So how do people get around that? Well, if I’m trying to think what I would do, I think my approach would be I’d be going, Darryl.
Darryl Bates-Brownsword (22:17)
can’t afford to now.
It’s change.
Kevin Harrington (22:41)
I’ve heard everything you’ve just said, sit down, shush, I’m going to ask you some questions. I go, right, so what’s my commitment going to be? What’s my week going to look like that’s going to be different to what it has been looking like? Explain that to me, explain how that’s going to change by month and by year as well. Who needs to be involved in this at what stage? And almost build out a roadmap, but make it personal to me.
Darryl Bates-Brownsword (23:00)
Yeah.
Kevin Harrington (23:11)
And I think that’s what everyone should do if they want to get to Scotland, ask someone how to get there, get some advice. Oddly, Chuck GPT is quite good at doing that. But for business exit, it needs to be woven into your business what you’re doing. So we can sit down with people and give a very personal roadmap for them that shows how they can accommodate the activities, how it benefits incrementally and long term.
That would be a great way of going. And the person that just texted me, I’ll thank them later for springing that idea to my mind.
Darryl Bates-Brownsword (23:47)
Brilliant. So we’re saying start early because we’re talking about a cultural shift in your business because if your business is owner dependent now or it wouldn’t get through due diligence now and you probably need some outside input to tell you whether it could or it couldn’t and you haven’t got all your board minutes and you haven’t got all your structures and all your systems up to date and tidy and as they should be and your business isn’t fully
If you haven’t got all those things in place now, then it’s going to take a while to get there. And if you haven’t got them now, that means that you haven’t got the culture in the business now to have them in place. So there’s a change required from the way you’re running the business today to what an exit ready business looks like when it’s run. And cultural change takes a while to implement and become the new norm.
Now having said all of that, sometimes what we find is you get a business through those two or three years and you’ve implemented and facilitated that cultural change. And the owners sort of come back to us and go, well, that’s really interesting. When I started this process, I was ready to exit. I just couldn’t wait for the day when I, when I got out of this business, it was draining the life out of me. It was causing me all sorts of stress. just wasn’t enjoying it anymore. It was just a drain.
Now with all of this restructuring and the cultural change, the business is naturally more efficient. It’s not dependent on me. I don’t have to get involved in every single decision. The staff have got a great initiative and capability and they know their capacity and the marketing’s working and everyone’s working. It’s just such a more enjoyable business to be part of on a day to day.
I don’t think I’m ready to exit yet. The business is exit ready now, but I’m not ready to go yet because I’m enjoying it and I’m having a bit more fun. But at least they now know that should an offer come out of the blue without going to market, that the business is going to withstand due diligence and attract a premium price because of all of the bits and pieces, all of the intangible assets that they’ve built and put in place. And because the owner can demonstrate that the business doesn’t need them there.
in an operational role. It’s a win-win, isn’t it?
Kevin Harrington (26:03)
It’s good stuff.
I’ll add just one final point on this that is again, related exactly to what you said. There will be some entrepreneurs listening to this podcast that have been with us for 28 minutes now, whatever it is. And they’ll be going, do you know what? That sounds like my energetic entrepreneurial spirit is going to be strangled and I’m going be in handcuffs with what they’ve been talking about. No, that is not the case. What it will do
is it will open up more space for you to be entrepreneurial. You will have other people doing more of the things you don’t enjoy doing. And you can get on with being a more successful entrepreneur as you work through the process of growing the business asset value ready for an exit in let’s say three years or whenever suits you.
Darryl Bates-Brownsword (26:49)
Yeah, it’s actually liberating rather than constraining.
Kevin Harrington (26:52)
Yes.
Darryl Bates-Brownsword (26:52)
Brilliant. Kevin, thank you once again for sharing your exit insights. We’ve covered a lot of ground on why start now? Why do I need my business to be exitable or sellable now, even though I don’t want to sell it yet? And what’s the short answer? You’ll get a better business to run and it’ll be more profitable and you’ll get your life back.
Kevin Harrington (27:14)
Spot on.
Darryl Bates-Brownsword (27:16)
Brilliant. Catch you next time.
Kevin Harrington (27:18)
Yeah, thanks, Darryl.