Exit Strategy Planning: How To Plan Your Company Exit (2026) – Shopify

Exit strategy planning means planning for the day you want to close, sell, or transfer your business so you have options to leave on your own terms while minimizing risk and maximizing profit. About 75% of business owners are looking to exit their companies within the next decade, but only about 20% to 30% of businesses that go to market will actually sell, according to the Exit Planning Institute. 

It’s a significant gap, and the owners who fall into it may find themselves stuck working in the business longer than they hoped, selling at a lower price, or even shuttering the company completely if they can’t find a suitable exit. That’s why it’s never too premature to begin exit strategy planning. 

In this article, you’ll learn what exit strategy planning entails, the types of exit strategies, and how to develop an exit strategy with advice from ecommerce entrepreneurs.

What is an exit strategy?

An exit strategy is a plan for how you’ll leave your business, including how you’ll liquidate your ownership or smoothly transition ownership to someone else. Exit planning can help business owners make decisions that support their end goal: hiring managers interested in taking over the business one day, keeping costs lean so financials are more attractive to a future buyer, and whether or not to take outside funding. It’s a sign of mature and strategic business thinking.

The terms of an exit process will vary depending on the entrepreneur and the business, but many of these exit planning strategies fall into a few categories:

• Sell to a third party. Some owners exit through an acquisition, which means selling the business—often to a larger company, a competitor, or another entrepreneur.

• Pass the business to a family member. Transferring ownership to a family member can be a smooth transition compared to selling to an external party, but it requires succession planning ahead of time.

• Arrange an internal transition. Managers or other leaders may purchase the business through a management buyout (MBO). Owners can also sell their shares and exit through an employee stock ownership plan (ESOP), which in some cases means employees become owners through worker cooperatives in which everyone has a vote.

• Initial public offering. In an initial public offering (IPO), a private company sells shares to outside investors on a public stock exchange. It is a way for owners to exit the business or liquidate some of their ownership stake, but it’s a far less common option generally reserved for companies with significant scale.

• Liquidation. An owner shutters business operations and sells off business assets.

Paradoxically, not planning for an exit can ultimately leave liquidation as the only option. With no plan, business owners may have to sell at a loss or end up unable to transition the business—because company operations depend entirely on them or they can’t attract a strategic buyer.

How to develop an exit plan

• Start planning early
• Define your desired outcome
• Consult with experts
• Identify your exit path
• Prepare your business

Here’s how to create a strategic exit plan, including advice from entrepreneurs who’ve done it. 

Start planning early

When you plan for your exit as early as possible, the process helps to guide your decisions going forward. The founders of Luxy Hair began planning a third-party sale three to four years before they were acquired by Beauty Industry Group in 2018. They prepared by finding a successor to take over as CEO and establishing a price and agreement terms, such as commitment from the new owner to continue its sustainability and fair wages practice, says Mimi Ikonn on an episode of the Shopify Masters podcast. 

By contrast, some entrepreneurs have a longer time horizon on exiting their business, and that informs operational decisions they make along the way, such as how they raise capital. 

“If I were to take private equity or venture capital, it automatically means I have a five-year exit strategy, right? I have to see a certain amount of growth because they have to see an exit. That’s what their business model is based on,” says Sana Javeri Kadri, founder of spice company Diaspora Co. on an episode of Shopify Masters. “I knew it was not going to be possible to go from $5 million to $100 million in five years. Our product grows in the ground, so I’m growing at the scale of agriculture.”

Had she taken more venture capital investment early on, Sana would likely have been pressured to chase growth and an exit—at the expense of her company values.

Define your desired outcome

In your exit planning, you’ll need to define your desired business outcome. At this stage, think less about the exact type of exit path you’ll take. Instead, focus more on your personal objectives for yourself and the company’s future.

Founder Nancy Twine’s company Briogeo was acquired by Wella in 2022, and Nancy advises founders to be honest with themselves about why they’re exiting. She tells Shopify Masters that for her, joining Wella wasn’t merely about the liquidity event; it was about setting Briogeo up for long -erm success. 

“It was really about: How do we get the resources and the support and infrastructure to continue to sustain our growth, and how can we find a partner that’s really synergistic to what we do as a brand?” Nancy says.

When Joanna Griffiths was approached by Essity about acquiring her period underwear brand, Knix, she stayed open-minded but firm in striking a deal that worked for her own goals. She ultimately agreed to sell 80% of the company for $320 million, and she negotiated a less traditional setup that allowed her to stay on as CEO. 

“I wanted to stay for as long as I possibly could and hold onto as much ownership as I possibly could,” Joanna says on Shopify Masters. “I found partners that I felt like believed in the long-term vision of what I was building and who had the same underlying mission, and I wanted to be a part of that.”

Consult with experts

Whether you know your desired exit or need some guidance to figure it out, it’s smart to seek advice from external experts who can talk through your options, share insights about typical owner exits in your field, and help you organize your finances.

Dave Carlson, founder of tech accessories company Wildflower Cases, recommends partnering with consultants who are knowledgeable about your specific niche. When exploring a potential sale, he worked with a consultant to understand metrics like gross sales cost and the value of their client list. He also performed a business valuation.

“I would always recommend trying to find a consultant who is within your industry, who can help you kind of put a value on your business,” Dave says on Shopify Masters. 

Identify your exit path

Next, identify the strategic steps that will lead to your desired outcome. If you hope to transition the business to an employee, you can prioritize hiring competent leaders interested in ownership, or train an eager family member to take over one day. If your goal is a sale, it’s helpful to think about what business performance will attract your ideal future buyer.

For example, Dieux Skin cofounder Charlotte Palermino was acutely aware that the startup companies she had previously worked for could operate unprofitably for a decade-plus while hoping for an “Uber exit.” But for her skin care brand, she recognized that the most successful exits in consumer packaged goods (CPG) usually come from businesses with a track record of profitability, she says on Shopify Masters. She focused on running lean and being profitable from day one to make her business appealing to a third-party buyer.

If you’re exploring an acquisition, Shopify’s Selling Your Store resource provides guidance on preparing your store for sale.

Prepare your business

If your goal is a sale, focus on building a strong foundation for your business: predictable annual recurring revenue (ARR), profitability, valuable and transferable assets, and up-to-date financial statements. 

Beyond the financial aspects, part of what makes a business attractive to potential buyers is the company’s ability to operate smoothly—without you as the owner, especially if you’re planning to exit as part of the sale. As your business and hiring grows, the company’s processes should be documented and repeatable. Delegate key tasks to trusted staffers. Build a reliable and engaged management team, and identify a successor, if needed.

At Luxy Hair, as Mimi and her cofounders pondered a future sale, they knew they needed to identify a leader who could take over if they wished to exit at that time. They selected Lulu Liang, who was originally hired as an assistant manager. She showed such promise that the founders named her CEO when she was only 25 years old. With Lulu at the helm, Mimi and her cofounders could begin slowly paving the path for their eventual exit.

“We were in all the meetings, and the team was executing our vision, but we were not there day to day; she was running the show,” Mimi says. “The vision was that when the business gets sold, she will stay with the business. And that’s exactly what ended up happening: We’re very grateful, because when the sale happened, we were completely free to leave literally the next day.”

For additional support, Shopify features like Store Ownership Transfer include preparations, checklists, and step-by-step workflows for when the time comes to make the switch.