Strategic Exit Planning – Key Issues to consider
Selling a business is an important decision that will have a lasting impact on your financial legacy.
A Registered Investment Advisor can be an integral part of the process as they often serve as the “quarterback” in working and coordinating with experts involved in the process.
KYUR works has strategic partnerships with experts involved in all facets of selling and exiting your business.
These are the key issues to consider.
Preparing for the Sale
Selling a business is not an overnight process; it requires strategic planning and preparation to ensure the sale yields optimal results. Here are some critical steps to get started:
Start Planning Early
Begin preparing well before you intend to sell. Early planning allows you to maximize the company’s value, address potential weaknesses, and ensure the business is in its best possible shape for potential buyers.
Assemble a Team of Advisors
Selling a business involves many complexities, making it essential to work with a team of trusted professionals. Consider hiring a:
• Registered investment advisor to assist with financial planning, tax strategies and post-sale wealth management.
• Business Broker or Investment Banker to help find qualified buyers and guide negotiations.
• M&A Attorney to manage legal documentation and compliance.
• Accountant to handle financial records and tax considerations.
Understand Your Business’s Market Value
Knowing the market value of your business is crucial for setting realistic expectations. A valuation expert or investment banker can help determine the worth of your business, considering industry trends, financial health, and potential for future growth.
Focus on Tax and Estate Planning
The sale of a business can create substantial tax obligations. Planning in advance can help reduce your tax liability, and estate planning ensures that wealth is distributed according to your wishes.
Define Your Sale Goals
Clarify your objections for the sale, including:
• Whether you want a full or partial sale
• Your post-sale financial needs.
• Any personal goals, like staying involved as an advisor or stepping away entirely.
During the Sale Process
Once you have prepared, it’s time to move into the active phase of selling your business.
1. Maintain Business Operations
It’s vital to keep your business running smoothly throughout the sale process. Buyers want to see a well-functioning, profitable company, so any disruptions or drops in performance can impact the sale value.
2. Secure Potential Buyers
Finding the right buyer is a delicate process. Ensure that each potential buyer signs a Non-Disclosure Agreement (NDA) to protect sensitive information about your business. A business broker can help manage communications and filter serious buyers from casual inquiries.
After the Sale
The journey doesn’t end once the sale is complete. Proper planning and management after the sale are just as important to ensure financial stability and meet your long-term goals.
1. Plan for Financial Diversification
Once you have cash in hand, diversifying your investments may reduce risk. A registered investment advisor can work with you to create a diversified portfolio based on your goals.
2. Consider Gifting and Asset Protection
Work with an advisor to understand options for gifting assets to family members or charitable organizations. Additionally, asset protection strategies can shield your new wealth from potential legal or financial challenges.
3. Determine Post-Sale Income Needs
With the support of a registered investment advisor, establish a plan to meet your income requirements and support your lifestyle after the sale.
How a Registered Investment Advisor Can Help
Partnering with a registered investment advisor can add significant value throughout the process:
• Planning and Timeline Development: A registered investment advisor helps you outline a clear plan and timeline for your sale, setting realistic expectations.
• Connections to Trusted Professionals: Advisors can recommend business brokers, estate planning attorneys, and tax accountants that will be needed to sell the business
• Financial Planning for Post-Sale Needs: They help determine how much money you’ll need to support your lifestyle after the sale.
• Asset Management: Managing the proceeds from the sale aligns with your long-term financial goals, helping secure your future.
Selling your business in a strategic manner is a complex process, but with proper planning and a solid team of advisors, you can achieve a sale that leaves an enduring financial legacy.
If you are interested in scheduling a consultation with or would like more information, please click the button below and fill out the form. At KYUR, we are here to ensure that you have all the resources you need to make informed decisions about your financial and estate planning needs.