Where are you in your exit?
Most business owners selling their company don’t know exactly where they sit in the journey, and the moves that matter at month 24 are completely different from the moves that matter at month 2. Let’s find out where you are.
Five phases from thinking about it
to the day after the wire.
Considering
3+ years outYou're thinking about it, but a sale isn't on the calendar yet. This is the highest-impact planning window, work done now is worth more than work done at any later phase.
Preparing
12-24 months before closeYou've decided. The clock is ticking, but you haven't gone to market yet. This is when most of the tax savings are won or lost, and most of the mistakes that cost millions are made.
Going to Market
6-12 months before closeThe business is on the market. Buyers are looking. You're getting indications of interest. The financial-planning decisions you'll need at LOI signing are coming faster than you think.
In Process
0-6 months from closeLOI signed or close to it. Due diligence is in motion. The next 90 days are about protecting what you've built, and getting ready for life on the other side.
Post-Close
After the wire hitsCongratulations. Now the real planning starts. The first 12 months post-sale are where most expensive mistakes happen. Slow is smooth. Smooth is fast.
Selling a business isn't
like retiring from a job.
Concentrated wealth event
Your entire net worth was tied up in the business. Now it's liquid, and suddenly taxable. Without a plan, you could give away 20-40% of the sale to taxes.
No more business income
The salary, the distributions, the company benefits, they're all gone at closing. Your investments have to replace all of it, and how you draw from them matters enormously.
A new financial identity
You've spent decades as an operator and owner. Becoming a retiree is a different role, and it takes a different kind of financial plan than the one that got you here.
ReferenceDeal terms, plainlyOpen ↓
LOI (Letter of Intent)
The agreement that kicks off the deal process, sets purchase price, structure, and exclusivity period. Once you sign, the clock starts.
Asset Sale vs. Stock Sale
The most consequential tax decision in any deal. Stock sales generally mean long-term capital gains on the full proceeds. Asset sales require allocating the price across categories, some taxed at capital gains rates, some at ordinary income.
Purchase Price Allocation
In an asset sale, the IRS requires the purchase price to be allocated across tangible assets, goodwill, non-compete agreements, inventory, and other categories. Each carries a different tax rate.
Goodwill. Enterprise vs. Personal
Enterprise goodwill (brand, systems, processes) gets capital gains treatment. Personal goodwill (your relationships, expertise, reputation), if properly documented, can also qualify for capital gains rates.
Depreciation Recapture
If your business owns equipment, vehicles, or real estate that was depreciated, selling above book value triggers recapture, taxed at ordinary income rates (up to 25% for real property, 37% for other assets).
Earnout
Deferred consideration paid after closing, tied to performance targets. They can be taxed as ordinary income or capital gains depending on structure, and create an uncertain income stream early in retirement.
Seller Financing / Seller Note
You agree to carry a portion of the purchase price as a loan to the buyer, effectively an installment sale. Spreads tax liability across years and generates interest income we factor into your retirement plan.
Working Capital Adjustment
A post-closing adjustment based on the business's working capital at close versus a target. This can increase or decrease your net proceeds, and it's negotiated in the purchase agreement.
Escrow / Holdback
A portion of sale proceeds held in escrow for 12-24 months to cover potential indemnification claims. Defers receipt of funds and the associated tax liability.
Reps & Warranties
Statements you make about the business in the purchase agreement. Breaching them exposes you to indemnification claims. R&W insurance has become common in deals above $10M.
Non-Compete Agreement
The buyer will almost always require you not to compete in the same market. Compensation paid for the non-compete is taxed as ordinary income, not capital gains.
Due Diligence
The buyer's investigation of your business, financials, tax returns, contracts, employee agreements, and liabilities. We help you anticipate what buyers will find.
Questions sellers ask us.
When should I start working with a financial advisor before selling my business?
Ideally 12-24 months before closing. The biggest tax-saving moves, deal structure decisions, pre-sale gifting, Roth conversions, and charitable strategies, require time to execute. If you're already in due diligence, we can still help, but earlier is always better.
How much will I owe in taxes when I sell my business?
It depends on the deal structure, how long you've held the business, your cost basis, and how the proceeds are classified. Long-term capital gains rates apply to assets held over a year, but allocations to goodwill, inventory, and equipment are taxed differently. We coordinate with your CPA to model the full tax impact before you sign.
What's the difference between an asset sale and a stock sale, and does it matter?
It matters enormously. In a stock sale, you generally pay long-term capital gains on the entire proceeds. In an asset sale, the proceeds are allocated across different categories, some taxed at ordinary rates, some at capital gains rates. The negotiation can be worth hundreds of thousands in tax savings.
I've always reinvested profits back into the business. How do I think about investing now?
You're no longer optimizing for business growth, you're optimizing for income reliability, tax efficiency, and capital preservation. We build a diversified portfolio that matches your new goals: predictable income, inflation protection, and the ability to sleep at night through volatility.
Do I still need life insurance after I sell the business?
Possibly, but for different reasons. Pre-sale, life insurance often covers business debt or a buy-sell agreement. Post-sale, you may want it for estate liquidity, to equalize inheritances, or as part of a charitable strategy. We evaluate your existing coverage in the context of your new balance sheet.
What happens to my health insurance when I sell?
If you're under 65, you'll lose your company's group health plan at closing. Options include COBRA, ACA marketplace plans, or a spouse's employer plan. We model the healthcare bridge into your first-year budget, and help you structure income to qualify for ACA subsidies if relevant.
Selling soon?
Talk to us first.
A 30-minute conversation costs you nothing and could save you more than you expect. We’ll look at your phase, your deal structure, your tax exposure, and what a real retirement plan looks like on the other side.