Selling Your Business: Three Questions Behind a Successful Exit  

Written by Mike Gerke, CPWA®  

As a business owner, selling your company is one of the most consequential financial events you’ll ever experience. It’s also one of the most personal; your business may represent a lifetime of effort and a core part of your identity. That’s why a successful exit requires patient, thoughtful planning.

What separates a good exit from a great one is alignment. The best outcomes occur when a sale is structured around your personal and financial goals. Once a deal is signed, however, many opportunities to plan for those outcomes vanish.

As a result, it’s important to put the right strategies in place early. From start to finish, selling a business typically takes one to three years. During that period, owners need to answer questions that will shape both the deal itself and the life that follows.

One of the first steps is to secure a business valuation from an independent expert. Understanding how to value your business correctly can set the foundation for a successful sale. Beyond valuation, it’s worth planning for how the proceeds will be managed and preparing for what comes next in your personal life.

Personal Finances: How Will the Proceeds Be Used? 

To maximize the sale price, you’ll need to prepare your business finances. But to make the most of the proceeds, you’ll also need to prepare your personal finances. Several pre-sale strategies can help you preserve more of what you’ve built, rather than losing a significant share to taxes.

The first strategy is evaluating eligibility for Qualified Small Business Stock (QSBS). QSBS is a tax designation that can potentially allow owners to shelter up to 100 percent of capital gains from federal income tax. For a company to qualify, it must meet specific IRS criteria, including limits on asset size and industry type.

You can also consider structuring the sale as an installment, rather than receiving the full amount at closing. Spreading the proceeds over time may keep your gains below annual tax thresholds.

In addition, gifting shares to family members before the sale can create opportunities to transfer common stock at discounted values, potentially lowering the total tax burden. This strategy involves careful coordination with your wealth manager, accountant, and estate planning attorney to address the tax implications and legal considerations.

It’s also worth considering how proceeds from the sale will be used. Building an investment to plan ahead of time, including asset allocation targets, can offer a framework for your anticipated liquidity. Otherwise, an influx of cash may not be put to work efficiently.

The technical side of a sale involves preparing your business and your finances. But there’s also a personal question worth asking: What comes next for you and your family?

For many owners, selling their business involves a profound shift in their identity and their routine. The role that has shaped much of their professional life may suddenly change or disappear altogether. Some choose to retire outright, while others pursue new ventures. 

For family businesses, these questions can be especially significant. Passing the company to children raises questions of interest, ability, and fairness that rarely have easy answers. Many families find that philanthropy offers a meaningful way to channel newfound wealth, even when family members retain no role in the business that generated it.

If you continue working with the business, it’s unlikely to be in the same capacity. Buyers may ask you to remain involved in an advisory capacity, which means less authority than you’re used to. Whatever your next steps look like, exploring the possibilities before the sale can help you start a new chapter with clarity and confidence.

Conclusion: Assembling Your Team

Selling a business involves answering nuanced questions across valuation, tax strategy, and personal vision. Few owners possess all the expertise needed to address every aspect of the process. The most successful exits are a team effort. 

Your deal team typically includes a valuation specialist, an accountant, an industry consultant, a business broker, and an estate planning attorney. Your wealth manager plays a unique role on the team. While we don’t replace specialist providers, we do coordinate the team as a whole—keeping everyone aligned and working toward your future. If you’re considering selling your business, we’d welcome the opportunity to walk through the process. None of these questions can be answered overnight, but starting early gives you the time to answer them well. We invite you to contact our office to start the conversation.