Ideally, three to five years before you want to sell or step away, and earlier if you want the best chance of qualifying for the small business CGT concessions. That lead time lets you build verifiable earnings, reduce the business’s reliance on you, and get the structure right while those things can still change. Owners who start in the final year usually find most of the outcome is already fixed.
Why Exit Outcomes Are Decided Years Before the Sale
A buyer pays for what they can verify. That means a track record of clean financial statements, profit that holds up once your personal expenses are taken out, and contracts and staff that will stay after you go. Building that record takes several years of consistent reporting, not a tidy-up in the months before listing.
The business also needs to run without you. If key client relationships, pricing decisions or technical knowledge sit only with the owner, buyers either pay less or ask you to stay on for an extended handover. Training a second-in-charge and documenting how things work are slow jobs, and they’re the ones that most improve what the business is worth.
The tax side runs on long timelines too. The small business CGT concessions have eligibility tests measured against your business group, and the asset generally needs to have been used in the business for a meaningful part of the time you’ve owned it. The 15-year exemption, as the name suggests, requires 15 years of continuous ownership plus age and retirement conditions. Restructuring to improve your position can itself trigger tax, so changes are best made well ahead of a sale.
Starting early also gives you time to decide what you actually want. Selling to a third party, handing over to family, or bringing in a staff member as a buyer each leads to a different plan. And if you’re closer than three years away, it isn’t too late. A shorter plan still sorts out records, reporting and handover, just with fewer levers left to pull.
Thinking About Your Exit Timeline?
The best time to plan the ending is while you’re still building. Read how we approach business exit planning for Central Coast owners, learn more about MYC Partners Accountants, or have a conversation with our team about where your business stands today.
