This Is the Exit Strategy Most Founders Miss | Dan Pascone with Evan Duke | EP #46

Dan Pascone: I’m Dan Pascone, CEO of Tailored Wealth and host of the Making Sense of Your Money podcast—real conversations to help high earners make sharper decisions so their money works as hard as they do. This is episode number 46. And today I’m joined by Evan Duke, who is a business exit planning strategist. And we break down what founders often get wrong about exit planning.

Dan: We talk about when you actually need to start preparing for an exit and why the business needs to run without the founder before a sale. Then we discuss how aligning your exit with your life plan determines whether selling your company feels like freedom or regret. Before we dive in, make sure you’re subscribed on your favorite platform. And if you find the show valuable, I’d really appreciate it if you left a quick review. Thanks so much, and enjoy.

Dan: Evan, thanks for joining the Making Sense of Your Money podcast. Excited to have you today.

Evan Duke: Glad to be here and really excited to talk with you.

Dan: Yeah, likewise, likewise. We’ve been on break for a little while, so this is the first one back in 2026. So I’m excited to have you and talk a little bit about your business expertise, which is a really, really unique segment—which is business exit, right? So for those founders, business owners, or even key executives out there, business exit is such an important time in your career from a wealth generation perspective. So I’m excited to chat with you about that. But first up, just tell us a little bit about your career track, how you’ve gotten into this, and currently what you do today.

Evan: Gotcha. Well, I actually started out wanting to be, of all things, a professional musician. I did my studies specifically on trumpet. I actually earned a doctoral degree, and it was actually during my work on that that I was beginning to realize that, you know, hey, we’re right in the throes of the Great Recession and the recovery. And I realized chances of me finding a job—they were not going to be that great, just because so many people were just holding on in college teaching.

Evan: And long story short, I really got involved with several music businesses and then kind of branched out. And I actually had a career for about a decade as the president of an orchestra. And really along the way, I just was able to get heavily involved in operations, really on the financial side with budget development and controls and really just such a wealth of experience.

Evan: As time was going on, I was beginning to realize we have a very serious issue that we’re facing today, and that is—with the silver tsunami, with all these baby boomers who are getting ready to retire, but more importantly, exit businesses. I have seen numbers as low as 74% and as high as 88% in terms of the number of businesses in the next ten years that are going to sell. You know, that’s just insane when you think about it.

Dan: Cut.

Evan: And that’s the big reason why I decided, you know, I really wanted to focus on this is because a lot of the work that I do is basically taking past experiences, but really trying to help make sure that each business is well built and ready to survive the M&A due diligence process, which anybody who’s experienced it would know that it’s very rigorous, very challenging. And there are just so many ways that you could wind up having value knocked off the business.

Dan: Yeah, absolutely. I want to get into that a little bit further, but paint us a little bit of a picture of the types of business owners and the types of businesses that you’re typically engaging with. Because I imagine, you know, there’s expertise in being able to work with certain size businesses or types of businesses. So tell us a little bit about the ones you typically operate.

Evan: Well, the ideal client—we’re talking about annual revenue between $5 to $50 million. When it comes to industry, it’s less important, but it’s more in terms of the actual stage of the business. Basically, it’s where the business owner—a lot of these businesses, baby boomer might have basically started this business in their garage, and they just built something that’s impressive.

Evan: They want to exit, and they need help doing it. And so, you know, that’s really who and what I am looking for. I mean, landscaping—that’s very hot right now, professional services. So really the profile will vary, but at the end of the day, it’s really just that particular stage where the founder or the owner—they’ve built a business, they’re ready to move on, and I come in and help them do that.

Dan: Got it. Okay. When is the right time? I’m sure you’re going to tell me the earlier the better, but when are you typically engaging with a business owner? When’s the right time to start to prepare for a sale, if you will?

Evan: Well, theoretically, as you said, earlier the better. I’ve heard some people say really day one. But, you know, for those of us who aren’t really—don’t have that much forethought—I mean, most of us are like, okay, is this business going to actually earn something? We’re not necessarily thinking about exit. But really the ideal thing is about five to seven years out is when you should start thinking about this because ideally you’re coming to me three to five years from the exit saying, okay, now is the time for us to do this.

Evan: And a lot of it, it’s not necessarily just getting things documented, it’s getting the right people in place to make sure that this is a successful transition.

Dan: Yeah, and you know, I’ve got a number of clients who either have sold or are preparing to sell their businesses. And I oftentimes want to engage in a similar timeframe to discuss the opportunities that they have from a personal finance perspective. And you’re obviously coming at it from a lens of the business and the corporate side. So what do you find are like the biggest challenges that a founder faces when they’re looking to prepare for that rigorous M&A process that you referenced?

Evan: The biggest thing is just not realizing what is in store. And really, one of the big things is just the level of preparation. It’s not necessarily about getting your books cleaned up, which, you know, that’s an important part of the process. But it’s the fact that, you know, trying to de-risk and things that we may have thought were a good idea, we realize actually they’re not.

Evan: Like, I remember actually it was a call I had with a friend of mine who’s an investment banker—said that there is this one business who was really proud of this one particular account that they had built out. I mean, it was massive. It was 80% of their business. As soon as the M&A advisor heard that, they said, okay, we need to stop here, because that—any buyer is going to look and go, okay, huge customer concentration risk.

Evan: So it’s things like that. And it’s really part of the reason why it’s so hard is, again, it’s things that we may not have realized was a problem. And one final example along these lines is, in addition to customer concentration risk, let’s say you’re a very friendly, people person. You are just making friends left and right, and in short, you’ve managed to leverage your personality to create an incredible network of people who do business with you.

Evan: Here’s the problem: a buyer is going to look at it and go, okay, I cannot see the difference between you and the business. So sometimes it’s that personal brand. So really, that’s why having somebody come in and take a look at it through a different lens will help you see things that I thought were pluses were actually minuses.

Dan: Yeah, that makes a lot of sense. That key man risk or the business being so reliant on the owner is certainly real. But when maybe, Evan, do you look at a business and say, it isn’t right for a sale or it isn’t right for some sort of M&A activity? Like, how do you kind of help the owner evaluate that? And then what are their other options if maybe, you know, they have some of those risks that you mentioned earlier?

Evan: Well, really on the customer concentration risk, it’s a matter of obviously like, okay, you need to find ways to not necessarily grow other accounts but bring in new accounts. And that’s just gonna take some time. Really, a lot of the others—like, for example, the personal brand—that again is gonna take some time because you’re going to need to find ways to basically make it more about the company and less about you.

Evan: Really, a lot of those—again, it depends on the situation. And, you know, I’m gonna be rather frank, and this is something that I hope people will take seriously. There are gonna be some situations where a person is gonna be trying to sell something and I’m gonna say, this is not gonna happen.

Evan: And I think of one particular potential client I talked with last year. He had—it was a stormwater drainage business. Just really impressive what he had done. But they didn’t have a single employee. He had some substantial IP—I mean, he had patents for the Eurozone as well as the US. So there was a lot of value to it. And he had some other assets that he owned.

Evan: But, you know, there were no employees and everything that had been done, while it made sense logically at the time, it was such that there was just no way that it was going to sell. And I just use this as an example that, you know, sometimes you will have that. But really, at the end of the day, the big thing is, you know, that this is why obviously the earlier you engage with somebody, the better, because some of these are going to take time to fix.

Dan: Yeah, absolutely, that makes a lot of sense. And then, you know, we’ve seen a real kind of storm of interested parties in acquisitions and buying businesses. You mentioned the amount of businesses that are gonna be sold. A lot of that is because of the baby boomer dynamic in America, but can you talk a little bit about, you know, from a buyer’s perspective—what typically marries up with the seller appropriately, right?

Dan: We’ve obviously—you know, you’ve seen private equity get into all these different types of businesses, including smaller, more mainstream businesses than maybe they had been in the past. So talk a little bit about that buyer-seller relationship and kind of figuring out where the right marriage is.

Evan: Well, and again, this is why having a good advisor is crucial. Really, you have multiple types of buyers, and understanding what they look like will help you a bit. You have strategic buyers who, you know, they might be trying to buy a complementary product or—like, say, an HVAC company. What they’re going to do is they might just try to buy multiple other companies and just, you know, consolidate. So you have a strategic buyer out there.

Evan: You have what we label financial buyers, which are private equity primarily. They’ll come in, they’ll buy a business, they’ll essentially do what—flip the business basically. And then obviously, you’ll have, you know, family offices, which really are kind of like their own unique niche. But here’s where it’s very important if you’re selling and the buyer-seller relationship—and why it’s very important that you don’t try and do it yourself.

Evan: These buyers are professional buyers. I was doing some research, and the private equity firm—your typical private equity firm—before making an offer on a business for buying it, has reviewed 80 other types of offers. They’re very thorough. And quite frankly, one important thing that also should be out there for your listeners are the unsolicited PE firm offers.

Evan: Somebody comes in, they say, you know, hey, we’d like to make an offer for this amount. And I remember a story about somebody receiving an offer of $52 million for their business. They thought, this is great. And they went and talked with their accountant who said, you know, it’s a good offer, but I don’t know if it’s a fair offer. Let me put it out to my network. And lo and behold, actually that business was worth 70 million.

Evan: So I use that illustration, I use all this to say, you know, beware—seller beware. You’re going up against people who are professionals and the dynamic is such that you need to get the right advisors to help even the playing field.

Dan: Yeah, that makes a lot of sense. And that’s a good segue to my next question, which is: how do you think about business valuation? How should a business owner think about business valuation? And then what sort of trends have you seen in the last year or so around business values in maybe various industries?

Evan: Well, when it comes to business valuations, there are really two important things to remember. Number one, I think for business owners, getting a business valuation—that is going to be really helpful for managing expectations. Just so that way you know, okay, this is around what I can expect.

Evan: On the flip side, when it comes to the business valuation, it’s realizing that there’s a difference between what the business is valued at and what, you know, the buyers are going to be willing to pay for. So that aspect of it—and that’s why, I mean, the M&A firm I work with on multiple things, you know, when they try to figure out what the value is, their approach is they’ll send it out to buyers, asking, you know, “Hey, we have this such-and-such business in the Southeast. How much is it worth?”

Evan: So that’s—when it comes to valuation, obviously it’s important to get them with some periodic frequency just because there’s a lot of good benchmark information. But just understanding how they fit in; it’s not like, okay, your business is valued at 50 million, therefore you should get 50 million for it.

Evan: The other thing that I wanted to add in addition to the subject of business valuation is with trends. This is a key thing: earn-outs are becoming more and more common. I forget what the percentage is, but there has been a sizable jump in the last—if I remember the research—about six years. I can’t remember what percentage of deals, but they’re becoming more and more frequent.

Evan: And a lot of it comes down to buyers—they’re just looking at the business and going, okay, yeah, we agree that it’s worth this, but, you know, we’re just not feeling comfortable, you know, going up to here. So if it performs at such-and-such a level, then, you know, we’ll give you an earn-out. So the earn-outs have become much more common. And again, that’s just because there’s some deeper due diligence and there’s some concerns about the fact that the business may not be actually worth the amount that the seller wants for it. And that’s kind of where that hashes out.

Dan: Yeah, that makes a lot of sense. I mean, it’s a de-risking mechanism for sure. Explain to our audience how a typical earn-out might look—like, how would that be structured with respect to the overall deal? And then, what does the owner need to do in order to maximize that earn-out?

Evan: Gotcha. Well, really, let’s say—I’ll just use a straight example. Let’s say that you are selling a landscape company for 10 million. And, you know, we’ll look at it and we’ll say, you know, this company, it’s great, but, you know, what we’re going to do is instead of giving you 10 million upfront, we’ll give you 7 million upfront. And over the course of the next three years, should it perform basically as expected, you can get a million per year over the next three years.

Evan: Now, obviously if it performs well in year one, you’ll get it. And, you know, if it continues to perform in years two and three, you’ll get it. But as is the case with some of these, okay, well, it falls short of expectations and as a result you don’t get it.

Evan: Now, your question—to answer the question about earn-out. Ideally, this is where getting your business optimized, operational and getting absolutely everything in order—that will come in handy because if you have it well built so that way it’s still humming after you left, it will continue to be very productive. Ideally, you know, if you’re able to get it optimized and completely ready, you may not even need the earn-out because there’s going to be no argument over whether or not it’s ready. That’s really—better preparation is going to be what’s going to help you maximize your earnings.

Dan: So I’m hearing kind of a key theme here, which is, you know, preparing the business to be able to run without such a reliance on the owner, right? That seems to be a key theme for the sustainability of the business and ultimately the value of it. What do you do and what do other advisors do to prepare a business owner to make what they’ve built less reliant on them?

Evan: That is a very good question. What I would do right at the beginning of my engagement is, in addition to a business and a cultural assessment, I’ll ask them to fill out—and I’ll also look at—the organizational chart. What we’ll get started, once I get all that information together, is like, okay, not only do I know what we need to do, but I know how the leadership team needs to look.

Evan: Obviously the business owner—well, they’re probably functioning as CEO, possibly as CFO, and, you know, who knows, maybe several other roles. Well, let’s find out in that business who we can elevate to CEO. And then, okay, if we have the talent, let’s take somebody who might be doing the current bookkeeper work, get them in a controller type of role to get that position filled up, then promote them up to CFO. If there’s somebody who would be a great COO, we could fill them in.

Evan: But by getting that leadership team and all of those responsibilities the owner used to have completely spread out, and then once that team is assembled, we start going to work getting everything thoroughly documented—make sure all processes, policies and procedures are clearly laid out. If there’s not a budget development process, get that instituted, make sure that there are proper controls in place.

Evan: In other words, start with the leadership team, get the right people, then build everything out so that way, you know, we have what I like to call the 90-day test. Can you walk away from the business for 90 days and it continue to function? If the answer is yes, you’re ready to sell. If the answer is you can’t be away for 90 minutes, we’ve got some problems.

Evan: So that really is the way that I would approach it. And I know there might be some other people who would approach it differently, but that is the methodology that I use to get it ready for sale.

Dan: Yeah, makes a lot of sense. All right, last question before we transition—and this is where my team comes in, but I want to hear from your perspective. What advice do you maybe give the actual owner on sort of their life post-business, right? How do you make sure that they’ve got all their ducks in a row from a personal perspective, whether it be financially, family, how they’re gonna spend their time, etc., etc.?

Dan: Because I’m sure, you know, most of the entrepreneurs that you deal with have spent a good portion of their life building this business, and it’s a key component to what they’ve been as a person. So how do you kind of help them on the personal side of life after the sale?

Evan: That is a great question and that is the reason why I absolutely love working with wealth managers in this process. Because, you know, really just getting them to think, okay, you’ve been spending 60–70 hours a week building this business—what are you going to do?

Evan: And I remember, I think it was last year, I had a conversation with a wealth manager. In fact, I even—I think I may even have shared this story earlier today with somebody. But, you know, they had a business owner client who was getting ready to exit. And they asked, okay, once the sale goes through, what are you going to do? And it’s like, okay, I’m planning to move to Colorado, specifically in the suburbs of Denver, and, you know, just spend time with friends and family.

Evan: Great. What are you going to do in Denver? And, you know, we look at this and it’s the type of thing—you might be thinking, well, I’m going to move to Denver and, you know, get a house there. But—well, no, seriously. You’ve been spending 60–70 hours in this business. Even in Denver, what are you going to do?

Evan: You know, there’s—I mean, some people, maybe it’s travel the world. I know Vistage chairs—you know, that would be something that could be phenomenal. I mean, if you’ve spent 40 years building a business, you could be a tremendous mentor to somebody.

Evan: But really, to kind of circle back to the question, it’s just a matter of thinking, okay, you’ve got to have something that you can really put yourself—pour your life into. Something that you can say, yeah, I feel like I get significance and meaning out of doing this.

Dan: Well said, and I think that’s so, so important. You know, a lot of times I’m helping people figure out—whether they be employees or they be business owners—figuring out sort of what they’re gonna do post-work. Figuring out the personal side of that, to your point, sometimes people take that for granted, but it’s so important to align the business strategy with your personal strategy and make sure that you’ve got things working hand in hand so that you can optimize what you’re trying to do with the rest of your life, which—that’s why we do all of this, right? So great points there.

Dan: All right, we’re gonna shift gears a little bit. You are officially entering the lightning round. All right, so here’s the deal with the lightning round. We’re gonna give you a series of questions. Just give us the first answer that comes to your mind. Could be a one-word answer, could be a long, drawn-out thought—just whatever comes to your mind. You ready?

Evan: Okay. I think so, we’ll see.

Dan: Get to know you a little bit better. One meal for the rest of your life—what is it? One meal, you have one meal for the rest of your life, what is it gonna be?

Evan: One meal? Absolutely the Supreme breakfast burrito.

Dan: Supreme breakfast burrito, I like that. I hadn’t gotten that answer before. That’s a good one. I like it, I like it. What’s one tool or technology—could be hardware, software, it doesn’t matter—other than your phone or your computer that you can’t live without?

Evan: I think this is outside of the box but kind of right up next to it. I’m going to go with my TV.

Dan: All right, that sounds good, that works, that works. Do you have a favorite quote or phrase about business or success?

Evan: Well, it’s funny because I’m actually looking on the wall and I have this quote by Kevin O’Leary: “Profit is the loudest applause your business will ever get.”

Dan: That’s a good one. Mr. Wonderful, I like it. Do you have a favorite book about business or success?

Evan: Wow, that is a really good question. That is a very good question. I know that it’s not about business, but I actually think—I read, it was actually during the pandemic, the biography of Gary Bettman, who is the NHL commissioner. Just him taking a league that made 400 million annually into, I think, six billion now in just 30 years, and just what he did. I’d go with that.

Dan: I like it, that’s a good one, very interesting. What’s one bucket list item you’ve already accomplished?

Evan: Going to Switzerland and getting a chance to hike up to the base camp of the Matterhorn in Zermatt.

Dan: Very cool, very cool. How long ago did you do that? Tell us a little bit about what that experience was like.

Evan: It was a little—it was… Okay, I’m gonna say it’s an undisclosed amount of time, but just because I’m looking at the calendar and realize it couldn’t have been that long ago. It took about nine hours to get up and back, and I was just so thoroughly exhausted. But the views were spectacular and just the incredible scenery.

Evan: And to kind of cap it off, that night there was this huge thunderstorm that went through and the next day there had not been any snow on the Matterhorn. It was completely covered in snow. So just thinking we left in the nick of time.

Dan: Wow, very cool. Good for you. Good for you. All right, last one: if you could give one piece of advice to your younger self, what would it be?

Evan: No matter how difficult things might seem to get, keep going. I think it was Adam Rose who was once interviewed and just noted that basically the difference between those who succeed and those who fail is those who succeed didn’t stop. And it’s that simple.

Dan: It’s such good advice. It’s so true of really anything in life if you think about it. And you know, sometimes in the moment it may not be that clear, but you hear that advice over and over again—you know, “I wish I had just stuck to it,” or those that really made it, they just stuck to it. So that’s really good and really simple advice, but so pronounced.

Dan: All right, and then finally, if our listeners wanna connect with you, collaborate with you, follow you, what’s the best way to do that or reach you?

Evan: Well, I’m on LinkedIn. My profile is Evan B. Duke. And then my website is EvanDuke.com. Really, either of those—I mean, I’m on LinkedIn regularly. Of course, my website, you know, I have an opportunity—I have a booking page as well as a button for you to call me. But those will be the two most effective ways to reach out and talk.

Dan: Yeah, I love following your stuff on LinkedIn. I think you’ve got some great content, so I urge any of our listeners to follow you, especially those that might be entrepreneurs, because Evan puts out a lot of really good insights there. So Evan, thanks so much for bringing your insights to Making Sense of Your Money podcast. Appreciate having you today.

Evan: Yeah, thank you. Thank you for having me and I hope you and your listeners have a great rest of the day and stay warm the rest of this year.

Dan: Yeah, we will, we will. We just got through a storm. Evan’s down in South Carolina. I’m up here in Connecticut and surprisingly—it’s very rare to say that—but we got very similar weather patterns. It’s kinda happening that way across the country right now, so it’s an interesting time.

Dan: That’s it for the episode. As always, you can find the podcast along with our newsletter and our YouTube channel all for free at makingsenseofyourmoney.com. And as always, prioritize your version of a rich life. Cheers.