Shareholder business exit planning: Find your North Star

But the reality is this: the success of an exit is rarely determined at the point of sale. It is shaped much earlier, by something far more fundamental: whether shareholders are aligned on their long-term goals. 

This is your North Star. 

Without a clear and shared North Star, even the best businesses can find themselves slowed down, devalued, or unable to transact at all.

But the reality is this: the success of an exit is rarely determined at the point of sale. It is shaped much earlier, by something far more fundamental: whether shareholders are aligned on their long-term goals. 

This is your North Star. 

Without a clear and shared North Star, even the best businesses can find themselves slowed down, devalued, or unable to transact at all.

Business exit planning risk: misaligned shareholders

It’s entirely normal for shareholders to see an exit differently: 

• One may want certainty now, even at a lower price. 
• Another may want to hold out for maximum value. 
• A third may prioritise legacy, people, or their future role. 

None of these positions are wrong. The problem arises when they are unspoken. 

When alignment hasn’t been established early, those differences tend to surface under pressure, typically when a buyer is already at the table. By then, options narrow, emotions rise, and value is put at risk. 

Define your North Star first when preparing a business for sale

A strong North Star answers three core questions: 

• What does success look like for each shareholder? 
• When is the right time to exit? 
• Under what conditions would we sell or walk away? 

Once this is aligned, decisions become clearer and more deliberate, even when they feel counterintuitive in the context of day-to-day trading. 

Every business wants to grow. But if an exit is part of the North Star plan, leaders have to be able to shape that growth in a way which maximises value for the outcome they want. 

Business exit planning and the exit valuation scorecard

One of the most effective ways to bring the North Star to life is through a simple exit valuation scorecard. 

This maps the key drivers of value in your sector across a low to medium to high spectrum, allowing shareholders to see: 

• Where the business sits today. 
• What “good” looks like in the eyes of a buyer. 
• What is realistically within your gift to improve. 

Typical dimensions for the exit valuation scorecard

• Growth profile 
• Revenue quality and contractual underpinning 
• EBITDA margin 
• Client concentration 
• Team depth and dependency on founders 
• Technology and scalability 
• Market positioning and “scarcity value” 

The value of this approach is directional as well as diagnostic. It helps answer the critical question of how to move the business in the right direction; aligned to the North Star.  

Some of these actions can feel counter-intuitive to what might be considered good business. For example: 

• You may choose to accept lower margin work to improve revenue visibility 
• You may prioritise contract structure over short-term profitability 
• You may invest ahead of need to demonstrate scalability 
• Or you may step back from certain activities that rely too heavily on individual shareholders 

Some of these are business-as-usual improvements, but without the clarity which underpins them, it’s all-too-easy to leave future value on the table. 

Shareholders must address the people questions early

One of the most common and avoidable issues is uncertainty around roles of the shareholders after the deal: 

• Who stays on? 
• Who exits, and when? 
• What happens if shareholders want different things? 

These are far easier conversations when they are hypothetical, not when a deal is live.

Not every deal is the right deal when preparing for sale

A higher valuation is not always the right outcome. Different buyer types bring different realities, and having a clearly defined North Star makes it simpler to decide which path is right: 

• Trade buyers may require ongoing involvement and may reshape the business. 
• Private equity can offer future upside, but with clear expectations of a second exit. 
• MBOs often prioritise continuity, typically at lower headline value. 

Your North Star is what determines which path is right, not just the number. 

Business exit planning timeline: foresight over hindsight

Exits should start long before a buyer appears. The earlier shareholders define and agree their North Star and understand how to move value in the right direction, the greater the likelihood of achieving a successful exit on their terms. 

The best deal outcomes we see are when shareholders sit down early and decide as a team what they are trying to achieve – with their North Star clearly in focus.