Why Founders Delay Their Exit (and What It Costs Them)
A Lesson From a Missed Opportunity
I once sat across from a founder in his late sixties…let’s call him Mike…who had built a wildly successful healthcare logistics company over three decades. Revenues were steady. Margins were strong. His leadership team could run the business without him. Still, every time we talked exit planning, Mike dodged. “Maybe next year,” he’d say. Or: “I’m not ready to let go.”
A year later, Mike suffered a stroke. He recovered, thankfully. But the business never fully did. His absence triggered key staff departures. Customers grew uncertain. The valuation he could’ve gotten a year earlier? Cut in half.
That experience changed how I counsel every founder.
Founder Delay
Founders delay planning and executing their exits for many reasons: emotional attachment, fear of boredom, identity loss, or simply not knowing what comes next. But these delays come at a cost…sometimes a catastrophic one.
The reality is this: the longer you wait to exit past your company’s peak, the more likely you are to encounter diminishing value, increased personal risk, and fewer quality buyers.
Timing is everything
You’ve probably heard the phrase, “Time is money.” In exits, it’s more like: “Timing is everything.”
When founders postpone exit planning, they often miss windows of optimal market conditions. Even worse, they risk unforeseen events, both personal or professional, that can erode value.
And yet, many delay because they believe they’ll “just know” when the time is right. That’s not how it works.
Exit readiness isn’t a feeling.
It’s a strategic position.
Laying It On the Line
Imagine putting your life’s work on the line without a plan. Now imagine doing that while the market turns, your competitors catch up, or your health fails.
This isn’t just about money.
It’s about legacy. Your legacy.
The longer you delay, the more your options shrink. You go from choosing your ideal buyer to hoping anyone will make an offer. From calling the shots to reacting under pressure. From legacy-building to damage control.
And here’s the real issue: buyers can smell hesitation.
They interpret it as risk.
And risk? It gets priced into the deal.
The founder who prepares early earns the right to walk away on their terms.
A Better Future
Now imagine the opposite.
You start planning 2–5 years before your target exit. You identify value drivers. You strengthen your leadership bench. You prepare emotionally and financially for life after the sale.
When the right buyer comes along, the one who sees your business as a platform for growth…then you’re ready.
You get a clean deal. You stay in control.
You harvest the value you’ve built.
You don’t just exit.
You graduate.
Start Early
Start early. Earlier than you think.
Build your business as if you’ll sell tomorrow, even if you plan to stay for years. That means:
- Documenting systems and processes
- Developing a strong leadership team
- Cleaning up financials and legal structures
- Reducing dependency on you. As in: taking a 3 month vacation in Fiji without your phone, reducing dependency on you.
But just as importantly: get clear on what you want after the exit.
A founder with a compelling next chapter rarely clings to the current one.
I use a framework I call “Exit Readiness”: a measure of personal readiness combined with business attractiveness.
When both are high, deals get done.
When either lags, everything stalls.
It’s a Process
Exit isn’t an event. It’s a process. The founders who win are the ones who start early, get honest about what they want, and build toward it with intention.
Waiting for the perfect time?
That might be the costliest decision of all.
David Hermann, CEO of hermanngroup and M&A Advisor/Broker at Sunbelt Business Brokers of Colorado
David Hermann is a transformative advisor and strategist who turns complex business challenges into extraordinary successes. Known for driving over $500 million in documented financial improvements for clients, David partners with C-suite leaders to unlock their full potential. With 60+ speaking engagements, numerous publications, and a spot in the top 1% of Consulting Voices and top 1% of the Social Selling Index on LinkedIn, he’s passionate about making strategy, change leadership, and operations insightful and accessible.