Exit planning is preparing a business for the point its owner leaves it, whether by sale, transfer to family or staff, or closure.
The price is set by what was built, not by the negotiation
Most of what determines a sale price is fixed years before the sale. Two businesses at identical revenue routinely sell for very different amounts.
What separates them:
Dependence on the owner. A business that cannot run without the owner is buying the buyer a job. This is usually the largest single factor, and the slowest to change.
Customer concentration. A large share of revenue in one customer is a risk the buyer prices in.
Recurring revenue. Contracted income is worth a multiple of the same amount of one-off work, because it survives the transition.
Clean books. Personal costs run through the business, informal arrangements and unreconciled accounts all have to be unpicked in due diligence, and every unexplained item reduces confidence and price.
How the price is arrived at
Small businesses are commonly valued at a multiple of EBITDA, adjusted for costs a new owner would not carry. The method and its limits are covered in business valuation.
Timing
The preparation that raises price takes years: reducing owner dependence, building recurring revenue, diversifying customers, cleaning records.
A business prepared at the point of sale sells at the price it is worth then. A business prepared five years ahead sells at a different one.
Transfer to family or staff
The same preparation applies, with financing usually the harder problem, since the buyer rarely has the capital and the purchase is commonly funded from the business's own future earnings.