When the Exit Planning Institute surveyed business owners in 2023, fewer than a third had a documented plan for leaving their companies. A Gallup poll two years later found that among firms whose owners were 55 or older, more than a quarter either had no long-term plan or intended to close the business rather than sell it. The usual reading of numbers like these is that owners are unprepared.
Talk to the people who actually buy those companies, though, and a different explanation emerges. Many owners have quietly concluded that they are not ready to sell, and they have reached that conclusion by measuring the wrong things. The schedule lives on a whiteboard. Invoicing runs through a spreadsheet, or a filing cabinet. There is no successor because there has never been time to find one. Each of these feels like a reason to wait.
To a buyer, none of them is.
Jamie Cusack, who runs Keystone Access Partners, a Shore Capital platform in the entrance and access control industry, described the pattern on a recent episode of Microcap Moments. A large share of the owners his team meets, he said, had no idea they were as ready as they were. Some were running on pen and paper, knew they needed a system, and were afraid of the change. In his experience that fear, more than anything about the business itself, was what kept the conversation from starting.
What owners measure
Ask an owner what a sale-ready company looks like and you will get a fairly consistent picture: current or modern software, clean financials going back several years, an org chart with a second layer of management, and a successor already in the building. It is a picture of a business that would not need a partner at all.
Almost nobody has that business, and the reason is not neglect. A founder who spends fifteen years on customers, hiring, and the thousand small judgments that keep a service company profitable has made a rational allocation of time. The systems did not get built because the relationships did. Owners understand this about their own companies, and then discount themselves for it anyway, because the checklist they are grading against was written for a different kind of firm.
What buyers measure
A buyer of a small company is trying to answer one question: what here will still be true in five years, and what can be changed in one? The whiteboard and the spreadsheet fall into the second category. Software gets selected and rolled out. Reporting gets built. A finance lead gets hired.
The first category is where the value sits, and it is precisely what a great business, even one that still runs on paper, tends to have in abundance. Customers who call this company before they call anyone else. Technicians who can look at a commercial door, or a furnace, or a roof, and know which of a thousand possible things is wrong with it. A reputation at the supply house and the permit office that took two decades to earn. None of that can be installed. All of it can be lost if the owner waits long enough.
Buyers are trying to separate what will still be true in five years from what can be changed in one. Owners tend to worry about the second list.
Seen this way, the owner with the polished operation and the owner with the whiteboard are not as far apart as they appear, and the gap often runs the other direction. The polished business has already captured the gains from its systems. The paper business has all of them still ahead of it, plus the relationships.
The question that is actually hard
None of this means every owner is ready. It means the difficult part of readiness is not necessarily operational.
Consider a company with three co-owners, the kind of situation that comes up repeatedly in the lower middle market. One wants to retire within the year. One wants to keep running the day-to-day. The third has spent twenty years getting to know everyone in the industry and would rather spend his time finding the next acquisition than managing the current one. There is no succession plan for the one retiring. In the conventional view, that is a problem to be solved before any conversation with a partner. In practice, the conversation is where it gets solved: each owner says what he wants next, and the roles are built around the answers.
What that requires from the owner is not a cleaner business. It is a clear answer to a personal question that most owners postpone, because the whiteboard is easier to look at. What do you want your role to be after a partnership? Run it, step back, do the deals, leave entirely? An owner who has asked himself that question is ready in the way that counts. “I’m not sure yet, and I’d like to talk it through” is a perfectly good answer.
(For one CEO’s account of how his platform works through these conversations with owners, the full episode with Jamie Cusack is on Microcap Moments.)
Sources
- Exit Planning Institute, 2023 National State of Owner Readiness (32% of owners have a documented exit plan).
- Gallup, 2025 small-business owner survey (27% of employer firms with owners 55+ unsure of long-term plan or intend to close rather than sell/transfer).
- Jamie Cusack, Microcap Moments Ep 43, Shore Capital Partners.