The Exit Dilemma: How ‘Pick Two’ Shapes Your Exit Strategy

You’ve probably heard the saying about home services: you can have it done quickly, cheaply, or well, but only two at the same time. There is such a trade-off when selling a business, too. Price, terms, and time form a triangle, you can focus on two but never all three. The key is knowing which “trades” you’re willing to make.

Prioritize Price? Be Flexible on Terms

If you want the highest price, you’ll likely need to be flexible on terms. That might mean:

• Offering a seller’s note or financing portion of the purchase price
• Agreeing to an earn-out based on future performance
• Rolling equity and staying involved as a minority investor

You “trade” some certainty and cash upfront for a stronger headline price and potential upside later.

Want Cash at Closing and Clean Terms? Accept a Lower Price

If you prefer clean terms and all cash at closing, you’re shifting risk to the buyer. Buyers respond by lowering the price to balance that risk. This trade typically results in:

• Faster closing
• Simpler negotiations
• Less uncertainty for the buyer

If speed and certainty matter most, expect to pay for it with price.

Want Both Price and Clean Terms? Be Ready to Invest Time

If you want higher price and better terms than currently possible, it can be done, but it takes time and effort. Investing 12 to 18 months to:

• Fix financial records and clean up reporting
• Increase revenue
• Reduce customer or supplier concentration risk
• Systematize operations to reduce owner dependency

This work can increase EBITDA, boost your valuation multiple, and strengthen your negotiating position on terms.

The Bottom Line

Selling a business always involves trade-offs. Decide which two factors — price, terms, or time — matter most to you, and be ready to trade the third.

The best time to start planning your exit is years before you intend to sell. That gives you enough runway to determine which factors matter most and position your business to exit on your terms.