Selling a business
Most of what you keep is decided years before the sale.
For most owners, the business is the single largest asset they will ever sell, and the sale is the single largest financial event of their life. Almost everything that determines what you keep is decided before a buyer exists.
Why owners call too late
Most owners call an advisor once a buyer shows up. By that point the entity structure is fixed, the financials say what they say, and the conversation is about price. How that price gets taxed was settled months or years earlier.
The work that actually moves your net proceeds is duller and happens earlier: how the entity is organized, how ownership is held, whether the books hold up under diligence, whether the business runs when you are not there. Each of those takes quarters to change. Done early they look like good management. Done the month before a letter of intent, they look like something else.
The decisions that matter most
- Entity structure. Whether how you are organized today still fits what you are about to do
- Deal structure. Asset versus equity, and how purchase price allocation changes the after-tax result
- Owner dependence. How much of the value walks out with you, and what that does to price and terms
- Clean financials. Three years of books that hold up under diligence without adjustment schedules
- Proceeds timing. Whether income lands in one tax year or several, and what that costs
- Estate alignment. Moving ownership interests before a valuation event rather than after
- Life after. What the proceeds have to produce, for how long, and for whom
Which of these apply to you depends entirely on your business. Some owners need two of them. That is a real answer and it is the one we will give you.
The timeline
A three-year runway
Structure
Entity review, ownership and estate alignment, and any changes that need time to look ordinary rather than opportunistic.
Readiness
Financial cleanup, reducing owner dependence, and identifying what a buyer will discount and why.
Modeling
Running deal structures side by side on after-tax proceeds, and defining the number you actually need.
Redeployment
Covering the tax liability, funding near-term needs, and putting the rest to work against a plan rather than a feeling.
What happens ninety days after closing
The financial side of a sale is solvable work. What catches people is the part about ninety days after closing, when the calendar is suddenly empty and the thing that organized your week for twenty years is gone.
Owners who plan only the transaction tend to make expensive decisions in that window: buying a business they do not want, investing on a timeline they have not thought through, or holding cash for years because nothing feels right. Owners who have talked through what comes next, before the wire arrives, tend not to.
It is not a financial question, exactly. But it shows up in the financial decisions, and it is worth having the conversation while there is still time to have it calmly.
Common questions
What owners ask before a sale.
How far in advance should I start planning to sell my business?
Most of the levers that change your after-tax proceeds close well before a buyer is at the table. Entity structure, how ownership is held, clean financials, and the timing of income all take time to put in place and can look suspicious if they change the month before a letter of intent. Two to three years is the window where planning is still cheap and credible. One year out, you are mostly negotiating rather than planning.
What is the difference between an asset sale and a stock sale?
In an asset sale, the buyer purchases individual assets of the business; in a stock or equity sale, the buyer purchases the ownership interest itself. Buyers usually prefer asset sales for the step-up in basis and limited liability exposure. Sellers often prefer equity sales for simpler, more favorable tax treatment. The gap between the two is negotiable and often worth more than a point or two of headline price, which is why it should be modeled before you agree to a structure.
How much of my sale price will I actually keep?
It depends on your entity type, your basis, how the purchase price is allocated, your state, and whether any proceeds are deferred. Two deals with the same headline price can leave you with very different amounts of money. Anyone quoting a percentage before seeing your returns and your cap table is guessing. The useful exercise is to model your specific deal structures side by side and compare the after-tax result.
Should I take an earnout or all cash at closing?
An earnout shifts part of the price into future performance you may no longer fully control. It can bridge a valuation gap and spread income across tax years, but it also concentrates your risk in a company you have just handed to someone else. The right answer depends on how much of your net worth the deal represents and whether you would be fine if the earnout paid nothing.
What happens to my retirement plan when I sell?
It depends on the deal. In an equity sale the plan often transfers with the company; in an asset sale it frequently terminates, which triggers decisions about distributions, rollovers, and timing that interact with the rest of your tax year. This gets missed regularly because it sits between the attorney, the CPA, and the advisor, and no one owns it.
Do I need a financial advisor if I already have a CPA and an attorney?
Your CPA reports what happened and your attorney papers the deal. Both are essential and neither is typically modeling what the proceeds need to produce for the next thirty years, or how the deal structure interacts with your estate plan and your retirement income. That coordination is the gap. A good advisor works alongside your existing team rather than replacing anyone.
What should I do with the money after the sale?
The most common mistake is deploying it quickly because it feels irresponsible to hold cash. Most sellers benefit from a deliberate pause: covering the tax liability first, setting aside near-term needs, and then investing the remainder against an actual plan. The money now has to do a job that the business used to do, and that job should be defined before the allocation is.
I am not planning to sell. Is this still relevant?
Yes, and this is the part owners tend to discover late. The work that makes a business sellable - clean financials, reduced owner dependence, documented processes - is the same work that makes it more profitable and easier to run. So even if you never sell, the work pays for itself.
Let's talk next steps
If a sale is anywhere on your horizon, it is worth a conversation now.
Thirty minutes, no cost. Tell us where the business is and what the timeline looks like, and we will tell you honestly what is still open and what has already closed.