Exit Planning in Mission

As part of our comprehensive exit planning services across the Kansas City metro, we work with Mission small business owners facing an economic catch-22. Your business generates $700,000 to $1.2 million in revenue. Healthy margins, good cash flow, supports your lifestyle well. You want to build transferability by hiring a number two who could eventually run the business.

The economics don't work. A qualified operations manager or general manager costs $80,000 to $120,000 annually including benefits. On a $900,000 revenue business with 30% margins ($270,000 owner compensation), hiring a $100,000 manager reduces owner comp to $170,000. That's a 37% lifestyle reduction to build transferability you might not need for five to eight years.

Most Mission small business owners can't afford that trade-off. So they keep running everything themselves, planning to figure out transferability later. Later arrives when they try to exit, and buyers discount heavily because the business requires the owner.

I've lived in this metro for 30 years. Mission's compact business district holds service businesses, boutique operations, specialized providers serving Johnson County at small scale. These businesses work well. They're just too small to afford traditional exit planning solutions designed for $5 million or $10 million companies.

A Mission professional services firm generates $850,000 revenue, $255,000 owner comp. The founder wants to exit in six years. Traditional advice is hire a COO to develop as successor. That's $95,000 annually for six years, or $570,000 total investment to build transferability. The business might sell for $450,000 to $650,000 at small business multiples.

The math doesn't work. Spending $570,000 over six years to create transferability for a business worth $650,000 is economic suicide.

The solution isn't hiring expensive management. It's building systems-based transferability that creates operational independence without requiring six-figure salaries. That's the Mission small business challenge: transferability economics at small scale.

The small business owner dependency trap is unique because it's not caused by laziness or poor planning. It's caused by economic reality. You can't afford the traditional solutions to owner dependency, so you stay dependent.

A $1.1 million revenue service business with 28% margins generates $308,000 in owner economics. To hire a proper operations manager who could eventually run the business independently, you need someone with 10-plus years of experience, proven leadership capability, and industry knowledge. That person costs $90,000 to $110,000 minimum in most markets.

Hiring them reduces owner economics to $198,000 to $218,000. That's a 29% to 36% lifestyle reduction. Most Mission small business owners can't sustain that cut, especially if they have mortgages, kids in college, retirement savings to build, or other financial commitments.

So they keep running everything themselves. They tell themselves they'll figure out transferability when they get closer to actual exit. Five or six years pass. They're ready to retire. They discover the business is worth $550,000 to $750,000 if they can transfer it, but only $200,000 to $300,000 in a distressed sale if they can't.

The transferability gap is worth $250,000 to $450,000. But building that transferability through traditional "hire a COO" approaches would have cost $540,000 to $660,000 over six years. The traditional solution costs more than the value it creates.

This is the prison you built, or more accurately, the prison that small business economics forces you into. You can't afford traditional transferability solutions. Without transferability, you can't exit at fair value. You're trapped by scale.

The solution is systems-based transferability instead of people-based transferability. You document everything. You create standard operating procedures. You build training systems. You develop part-time or fractional leadership instead of full-time expensive managers. You use technology to automate what larger businesses use people to manage.

This approach works at small business economics. You might invest $30,000 to $50,000 annually in systems development, documentation, and fractional management support instead of $90,000 to $110,000 in full-time management salary. Over five years, that's $150,000 to $250,000 instead of $450,000 to $550,000.

The transferability outcome is similar, the economics are sustainable at small business scale, and the value creation justifies the investment.

But most Mission small business owners don't know this approach exists. They think the choice is hire expensive management they can't afford or stay owner-dependent. There's a third path: build systems that create operational independence without requiring expensive people.