How an Exit Planning Roadmap Actually Works: 18 Months Before, 6 Months Before, Day Of

The tax decisions that determine how much of a sale you actually keep have to be made 12 to 24 months before closing. Once a letter of intent is signed, most of those windows are shut, and the final 90 days are for execution rather than strategy.

18 to 24 Months Out: Get the House in Order

Most owners skip this period because a sale still feels abstract. It is where the most money is made or lost.

Three things belong on your list. First, get a formal valuation from a qualified appraiser, not a back-of-napkin multiple. It surfaces documentation gaps a buyer will find anyway. Second, clean up your books. Owner perks, related-party transactions, and inconsistent add-backs compress your multiple in due diligence. Fixing them now gives you 12 to 24 months of clean financials. Third, review your entity structure. An S-corp election, a reorganization into a holding company, or a trust ownership change can meaningfully shift how sale proceeds are taxed. That Soil layer, how ownership is structured and where income lands, is close to impossible to rearrange once a buyer is at the table.

6 to 12 Months Out: Build the Team and the Room

Now the sale is real. You need a CPA who does M&A work, an M&A attorney, a financial advisor who understands post-liquidity planning, and often an investment banker or broker.

You also need a data room: three to five years of tax returns, financial statements, customer concentration analysis, contracts, and key-employee agreements. Buyers who find surprises in diligence walk or reprice.

It is also the moment for family conversations. If your spouse, adult children, or aging parents are part of your financial picture, they need to know a liquidity event is coming, because estate documents, beneficiary designations, and titling decisions take time to execute properly.

90 Days Out: Last Moves Before the Clock Stops

Pre-sale Roth conversions can make sense if your income will spike in the year of sale and push future conversions into a prohibitively expensive bracket. Charitable bunching into a donor-advised fund accelerates deductions into a high-income year. If you hold appreciated assets outside the business, their location and timing matter before the event.

The 2026 annual gift tax exclusion is $19,000 per recipient. If wealth transfer to family is part of your plan, this is the window to fund and document those gifts.

The Takeaway

The one fact that sets your timeline is how firm the buyer is. A someday sale means you still control the structure; a term sheet in hand means you are optimizing around decisions already made.

The painful version is the owner who runs a textbook process, hires the right advisors, and negotiates a strong price, then learns at closing that the entity structure locked in years earlier turned a large share of the gain into ordinary income. Nothing in the last 90 days undoes that.

If a sale is plausible in the next two to five years, the sequencing of valuation, structure, and family planning is worth talking through while every option is still open.

The information provided is for educational purposes only and does not constitute investment, legal, or tax advice. Consult with qualified professionals for guidance specific to your situation.