Most business owners think selling a business is a single event, but Tim Martinez disagrees. And after 25 years of working with thousands of companies across the globe, he's got the receipts to prove it.

In a recent conversation with the Business Acquisition Summit Expert Interview Series, Martinez broke down why so many exit deals fall apart, what family-owned businesses consistently get wrong, and the 3-step framework he believes every owner operator needs to understand before they ever shake hands with a buyer:

Tim Martinez didn't come up through business school…

He came up through skateboard shops, DJ gigs in Hollywood, apparel brands, mobile espresso businesses, and app companies — selling each one and moving on to the next.

"I didn't know anything, by the way," he says of those early years. "I didn't know what these things were called. I didn't know about acquisitions. I never heard the word ‘exit.’"

What he did know was how to make a dollar, how to write a business plan, and how to ask the right questions. Over time, that combination built him a career at the intersection of management consulting, investment banking, and entrepreneurship.

Today, Martinez works primarily with C-suite executives and owner-operators — predominantly family-owned businesses doing up to $100 million in revenue — helping them figure out how to grow, how to scale, and ultimately, how to get out.

When Martinez gets a call from a business owner who says they're "ready to sell," the first thing he does is slow everything down.

"Exit planning is a process, not an event," he says. "You need a deal team. You can't do it with one person."

The #1 reason deals die, in his experience, isn't financing or due diligence, but misaligned valuations. Owners come to the table believing their business is worth significantly more than buyers are willing to pay — and without proper preparation, those conversations collapse fast.

"We tell them what their value is. They're not happy with that, and it's like — okay, then now we need to grow," he says. "Let's focus on growth planning, strategic advisory. Let's tear it apart."

For many family-owned businesses sitting around $3 million in revenue, Martinez sees acquisition-driven growth as one of the most underutilized strategies available.

Rather than grinding for incremental gains through more ads, more content, and more staff, buying 2 or 3 competitors over 5 years can radically change the trajectory of a business — and dramatically improve its exit valuation when the time comes.

But before valuations re-enter the picture, Martinez believes there's a deeper problem: most owners haven't done the internal work required to sell...

And that's exactly what the 3-Exit Framework addresses:

Before a business can be sold, its owner has to get their head around the idea that they cannot run it forever.

This sounds obvious, but in practice, it's anything but.

"Your identity becomes the business," Martinez explains. "People get scared because they're like, 'What do I do if I'm not the business?' Even though they may be wealthy and have all their assets paid off, they still can't let go of that business identity because they don't know who they are without it."

He recently ran a survey on his blog asking business owners about their exit planning habits — 66% said they would start planning when they were ready, when an offer came in, or essentially when forced to. In other words, only when something made them act.

The mental exit is about dismantling those limiting beliefs before they become liabilities. Beliefs like: No one's going to want this. It might not be worth anything. That kind of deal only happens for other people.

The work here is mindset, and it has to come first.

Once the mental hurdle is cleared, the next exit has to happen before the business can function independently — and independently is exactly how buyers want to find it.

The owner has to exit their role.

"You simply cannot be the CEO anymore," Martinez says. "You need to find another smart person who's not only capable, but can far exceed anything you've ever done in your entire career."

He knows that stings, but that’s also the point.

To start this process, Martinez gives owners a simple 2-week exercise: carry a notepad everywhere and write down every single thing done throughout the day. Every email answered, every phone call taken, every supplier relationship managed. At the end of 2 weeks, that list becomes the foundation of a standard operating procedure (a blueprint) for whoever comes next.

Most owners don't want to do it.

"They say, 'I talk to customers, I talk to suppliers, and no one can do what I do,'" he notes. "That's exactly the problem."

This phase also includes what Martinez calls the "bus plan." The uncomfortable question is simple: if the owner walked out the door today and got hit by a bus, what would happen to the business? To the employees, the suppliers, the outstanding receivables, the family?

The 5 forces that pull a business owner out of their role against their will — death, divorce, disease, dysfunction, and distance — are the same forces that destroy unprepared businesses overnight. Martinez calls these the Five D's, and they're the reason proactive planning always beats reactive scrambling.

Only after the mental and role exits are complete does the technical work of selling begin.

This is the part most people think of when they hear "exit": valuations, due diligence, building a target list, understanding the difference between strategic and financial buyers, deal structuring, earnouts, negotiation, and transition planning.

"There are millions of articles written about this," Martinez says. "That's all the technical stuff. It's not very complicated."

What makes it complicated is when owners skip the first 2 exits and arrive at this stage emotionally unready and operationally unprepared. They get a valuation they weren't expecting, the deal collapses, and everyone walks away frustrated.

The sequence matters.

One of the biggest questions Martinez hears is: When is the right time to sell?

His answer: start planning before it feels necessary.

"Timing is everything," he says. "You're either in control of the process and making time work for you, or timing is going to happen to you."

He points to businesses that were wiped out by the pandemic as a case study in what happens when owners assume tomorrow will look like today. Market shifts, automation, and economic disruption don't give advance notice. The business that has value right now may not have the same value next year.

For Martinez, exit planning starts the moment a new venture begins. "For any business venture I get involved in, ever — the first thing I think about before I even start is how we're going to get out of this thing."

This demonstrates that selling a business is less of a single event, and more of a sequence.

The mental exit comes first: getting the owner's head right, dissolving the identity attachment, building a belief that a life exists beyond the business.

The role exit comes second: documenting everything, building systems, finding the right successor, and stress-testing the organization through the “bus plan.”

The actual exit comes third: valuations, deal teams, buyers, structure, and — yes — the sale.

Skip the first two and the third one rarely works.

Thanks for reading Acquiring & Exiting.