07/11/2025

The DIY Exit Plan: Why They Fail

Source: Body Shop Business

Sheldon was a shop owner who was looking at possibly transferring ownership of his shop to his employees. After an initial conversation discussing various options, we did not hear back from him. A few months later, he contacted us to tell us that a buyer had come to him with an offer that appealed to him.  We suggested that he speak with an attorney, who we put him in contact with. In that conversation, we found that he had already signed a letter of intent yet, upon some questioning, we found that there were several vital items that he missed which were needed to give him the best outcome. Sheldon again disappeared, but came back to us a couple months later to inform us that the buyer pulled the offer and he was back to square one.

Every business owner hopes for a smooth and successful exit, but trying to handle it all alone often leads to unnecessary stress and costly mistakes. “Do-it-yourself” (DIY) exit plans might seem simple at first, but they often fall apart because of inexperience, emotional decisions and poor preparation. 

Let’s look at why these plans fail and share practical tips to avoid common missteps. A well-planned exit with expert guidance is crucial because it ensures a smooth, stress-free transition and protects the business and legacy you’ve worked so hard to build.

The Importance of an Exit Strategy

Planning for an exit is a critical step for any business owner looking to secure their financial future and protect their legacy. A well-thought-out exit strategy helps maximize the value of your business, ensuring that you get the best possible return when it’s time to sell or transfer ownership. Without a clear plan, you risk leaving money on the table or facing an unfavorable sale.

An exit strategy also ensures financial security post-exit. Whether you’re retiring or pursuing new ventures, having a solid plan helps guarantee that your personal finances remain stable and that you can enjoy the fruits of your labor.  This peace of mind is invaluable as you move on to the next chapter of your life.

What Makes a Good Exit Plan?

A good exit plan involves more than just selling the business; it requires financial, operational and legal readiness, accurate financial records, streamlined operations and clear legal structures in place. It also requires setting specific goals and timelines for the transition, ensuring that you meet your objectives without rushing the process. 

While collaborating with professionals, such as financial planners, accountants and attorneys, is essential to ensure every detail is handled properly, having a certified exit planner coordinate the process with the other required professionals helps to ensure all are working together toward a common goal and allows for a smooth and successful exit.

Key Reasons DIY Exit Plans Fail

Many business owners believe they can handle their exit without coordinated help, but doing so often leads to costly mistakes and missed opportunities. Here are some of the key reasons why DIY exit plans fail:

• Lack of expertise. One of the most common mistakes in DIY exit plans is poor business valuation.  Without the right expertise, owners often either overvalue or undervalue their business, which can lead to selling too early or not attracting the right buyers. Additionally, they might miss out on valuable opportunities to increase the business’s worth before putting it on the market.  Having a business continuity plan, in the event that you cannot fully run the business, and a stay bonus program for your key employees, which provides incentives for them to stay with you or a successor, will add tremendous value to your business. Furthermore, owners often overlook tax implications, which can lead to unexpected liabilities and reduce the amount they ultimately keep from the sale. In addition, legal complexities, such as issues with contracts, compliance or regulatory obligations, are also common pitfalls. 
• Emotional involvement. It’s natural for shop owners to become emotionally attached to their companies, but this emotional connection can cloud judgment during the exit process. Being too attached can make it difficult to make objective decisions, leading to unrealistic expectations about the business’s value or future. Financial and operational goals may become misaligned as emotions take over, ultimately causing confusion and frustration.
• Poor financial and operational preparation. A lack of organized financial records is another common reason DIY exit plans fail. Messy bookkeeping or incomplete financial statements make it harder to attract serious buyers. Similarly, if the shop is overly dependent on the owner, potential buyers may hesitate to purchase, knowing that the business might not thrive without the owner’s direct involvement. Failing to address weaknesses — such as inefficiencies, high employee turnover or outdated processes — can also significantly impact the business’s value and attractiveness to buyers.
• Limited market understanding. Many owners lack the connections and resources needed to find qualified buyers, leading to limited market exposure. Misjudging market conditions is a frequent mistake; attempting to sell during unfavorable economic times can result in a lower sale price or difficulty finding interested buyers.
• Lack of negotiation skills. Many DIY planners struggle with structuring deals effectively, often missing out on opportunities to create win-win arrangements like earnouts or asset sales. On top of that, poor communication with potential buyers can make things even harder. Owners might not present their business in the best possible way or fully understand what buyers are looking for, which can stall negotiations and lead to missed opportunities.
• Insufficient succession planning. A lot of shop owners don’t think ahead about who will run the company after they leave.  Without a strong management team or a trained successor in place, the business can quickly lose its footing. Employees might feel uncertain about their future, and clients may start to lose trust. These leadership gaps can hurt the business’s value and make the transition chaotic for everyone involved.
• Unrealistic timeframes. Exiting a business takes time — often much more than owners realize. You need time to prepare the business, address any weaknesses and find the right buyer. Rushing the process can lead to missed opportunities to improve the business’s value, which means settling for a lower sale price. 
• Weak post-exit planning. Selling your business is only part of the journey; what happens after the sale is just as important. Without a clear plan for managing the proceeds, financial stability can become a concern. And on a personal level, many owners struggle with what to do next. Having no vision for life after the business can lead to feelings of dissatisfaction and regret.

Avoiding DIY Exit Plan Pitfalls

• Work with professionals. Having a team of experts makes all the difference.A certified exit plannercan guide you through the entire process, helping you set clear goals and timelines. They’ll coordinate with other professionals, like accountants who ensure accurate financials and minimize taxes, M&A brokers who connect you with the right buyers, and attorneys who handle contracts and legal risks.  This team effort ensures that every detail is covered.
• Start early. Planning your exit three to 10 years in advance gives you time to improve your business and address weaknesses. You can use this time to upgrade systems, train your staff and provide for adequate financial protections for yourself and employees. These steps not only boost the value of your business but also make it more attractive to buyers.
• Create a comprehensive plan. A successful exit requires more than just a sales agreement.  You’ll need clean financial records and a professional valuation to show buyers the true worth of your business. Documenting processes and reducing dependence on you as the owner are also critical. And don’t forget to prepare a strong succession plan so the business runs smoothly even after you’re gone.

Benefits of a Professionally Managed Exit Plan

• Maximized business value. One major benefit is maximizing your business’s value. Experts know how to position your business to attract the right buyers and secure the best price. They can also help structure deals with terms that benefit both you and the buyer, ensuring you get the financial return you’ve worked so hard for.
• Smoother transition. A professionally managed exit also leads to a smoother transition.  With proper planning, your employees, customers and the new owner will experience less disruption. This stability helps protect the legacy of the business you’ve built and gives the buyer confidence in their investment.
• Peace of mind. Perhaps most importantly, working with professionals provides peace of mind. Legal documents, financial records and operational details are handled with precision, reducing the risk of surprises or errors. You can focus on the future knowing every part of the process is being managed by experts who have your best interests in mind.

Summary

Trying to handle an exit plan on your own often falls apart because of inexperience, emotional ties to the business, lack of preparation and not fully understanding the market or how to negotiate effectively.  These challenges can lead to big mistakes, like undervaluing your business, running into tax or legal issues, messy financial records and problems with how the business operates.  On top of that, unrealistic timelines and not having a solid plan for leadership transitions can leave your employees and potential buyers feeling lost and uncertain.

Without professional help, it’s easy to rush decisions, sell for less than the business is worth and end up unprepared for life after the sale.

The best way to ensure a smooth and profitable exit is to start planning early, get professional advice and create a clear plan that safeguards your efforts and prepares you for a stable future.