Why Most 2026 Exits Will Fail — And How to Prep Your Business Now

Why Most 2026 Exits Will Fail (and the Profit-First Plan That Wins)

Hard truth: most exits don’t fail because of markets. They fail because owners ignore predictable, fixable issues. If you plan to sell in 2026, your runway is short. You can still win—if you focus on profit, systems, and a business that runs without you.

Here’s what tanks deals—and how to flip it.

The Brutal Reality: Why Most Exit Plans Crash and Burn

You Own a Job, Not an Asset

If you disappeared for 60 days, would revenue, delivery, and ops keep humming? If not, buyers see risk, not value.

Signals you still own a job:

- You make most key decisions.

- Sales rely on your relationships.

- No clear SOPs; “tribal knowledge” lives in your head.

- Hiring, pricing, and delivery bottleneck at you.

- KPIs are either missing or ignored.

Result: buyers walk or discount heavily.

Your Profit Planning Is Broken

Common killers:

- Short-term squeezing to spike this quarter’s EBITDA.

- Hockey-stick forecasts with no evidence.

- Hidden costs and messy add-backs buyers won’t accept.

- Cash flow blindness—P&L “profit” but no cash.

Buyers pay for durable, predictable cash flows. Not stories.

You’re Out of Runway

Great exits take 3–5 years. Waking up 12–18 months from “done” means:

- Not enough time to de-risk owner dependency.

- Sloppy financials and contracts under a microscope.

- Discounts and retrades during diligence.

The Five Ds

Death, disability, divorce, disagreement, distress.

Without a plan, they force fire sales at 20–30 cents on the dollar.

Minimum coverage:

- Operating continuity plan and leadership bench.

- Key-person insurance and a written buy-sell.

- Cash buffer and lender lines.

You’re Emotionally Entangled

Identity = the business. That clouds judgment and delays clean handoff.

75% of owners regret their exit within a year—usually not about money.

Ask yourself:

- Who am I after this?

- What will I build next—wealth, time, or both?

The Profit-First Strategy That Actually Works

Profit-first isn’t “cut everything.” It’s design. Build a business that throws off cash, grows without you, and is simple to own.

Start Early (5–10 Years Is Ideal)

- Set an exit window and value target.

- Map value drivers and risks; fix one major risk per quarter.

- Build a team that can run today and scale tomorrow.

Short runway? See “Triage: 12–18 Months” below.

Build Systems, Not Dependencies

Your job is to leave daily ops.

- Document the 20% of processes that drive 80% of results.

- Delegate decisions with clear guardrails and KPIs.

- Turn “how we do it” into one-page SOPs and checklists.

- Install a weekly operating rhythm: priorities, scorecard, issues.

A business that runs without you is worth 3–5x more than one that doesn’t.

Master Your Numbers

Be diligence-ready all year.

- Clean monthly close and cash reconciliation by day 10.

- 13-week cash flow, rolling 12-month forecast, and budget vs. actuals.

- Quality of earnings mindset: clean add-backs, no commingling.

- Track unit economics, LTV/CAC, gross margin by product, churn, and revenue concentration.

Sloppy books kill deals. Clean, boring numbers get bid up.

Create Realistic Projections

Base forecasts on evidence, not optimism.

- Use ranges (base, stretch, downside) tied to leading indicators.

- Include working capital, seasonality, and capex.

- Model customer concentration risk and pricing sensitivity.

Buyers trust conservative plans you can beat.


Build Durable Revenue

- Tighten positioning; be the obvious choice for a specific buyer.

- Improve pricing power with clear value and packaging.

- Reduce churn with success plans and proactive retention.

- Diversify channels; reduce “single point of failure” risk.

Document Everything

- Customer, supplier, and IP agreements organized and current.

- SOPs for sales, delivery, finance, and ops.

- Single source of truth: data, passwords, org chart, and RACI.

Documentation reduces perceived risk and speeds closing.

Keep Multiple Exit Options Open

- Strategic sale, PE majority/minority, ESOP, MBO.

- Run a dual-track until the market picks the lane.

- Prepare materials for each path early.

Assemble Your Deal Team

- M&A attorney, CPA with QofE experience, banker/broker, wealth advisor.

- Incentivize your management team for a clean transition.

- Start vendor diligence on yourself before buyers do.

Get an Exit-Readiness Assessment

Start with clarity. [Take our Obvious Choice Scorecard](https://peakprofitsllc.com/obvious-choice-scorecard). You’ll see gaps, timelines, and a practical plan to increase value.

Triage: 12–18 Months From Exit

If 2026 is your window, focus on moves that move multiples:

- Replace owner with a capable GM or elevate a 2IC.

- Lock key customers in multi-year, assignable contracts.

- Clean financials; separate personal expenses; validate add-backs.

- Cut low-margin SKUs; double down on high-margin winners.

- Reduce customer and supplier concentration.

- Implement a 13-week cash cadence and weekly KPI review.

- Document the top 15 SOPs that run the business.

- Create a credible base-case forecast; kill the hockey stick.

- Build a tight data room now—update monthly.

Don’t Wait: Start Now

- Pick a date and a number.

- Commit to profit-first operations.

- Systemize until you’re optional.

- Make the business simple to buy and easy to own.

Do this and buyers won’t need convincing—they’ll compete.

Ready to get started? [Schedule a profit acceleration call](https://peakprofitsllc.com/profit-acceleration-call) and let’s build your exit strategy the right way.