By Ted Stricker, CFP®
So, you’re thinking about selling your business. It’s a big step, isn’t it? It’s the kind of move that makes you look back at all you’ve achieved—everything from the personal sacrifices to the triumphs—and think about the best way to transition.
That’s where organized financial planning comes in. Despite what you may have heard, setting a price is just one part of the equation. Organized financial planning involves understanding the full financial scope of your business, from valuation to tax implications. Without a clear strategy, you risk rushed decisions and overlooked opportunities, all of which can potentially devalue the hard-earned legacy of your business.
On the other hand, a well-thought-out financial plan can help enhance your business’s appeal, streamline the selling process, and potentially increase your selling price. So, where do you begin? The good news is, it doesn’t need to be complicated. Start with these fundamental steps to master the art of selling your business, so you can set yourself up for a smooth and successful transition.
The Importance of an Organized Exit Plan
Wondering why an organized exit plan is so important? Simply put, a well-structured exit plan is essential for a smooth and profitable transition. For most business owners, this means looking at your business’s finances from top to bottom and setting up a plan that covers everything from how much your business is worth to how you can save on taxes when you sell. Ultimately, this process helps you organize your finances so when you’re ready to sell your business, everything works smoothly and efficiently.
Now let’s explore the key steps to organized financial planning and how each one can help you get the most from the sale of your business.
Enhance Your Business Valuation
Getting a clear idea of your business’s worth is the first step in organized financial planning. This not only sets the stage for how much you’ll ask but also shows potential buyers just how financially solid your business is. A well-documented and justified valuation—meaning one backed by clear records and future projections—can significantly boost buyer confidence. This is why it is so crucial to keep your financial records up to date and to have a professional business valuation completed to reflect your business’s true worth.
Optimize Your Taxes
Most business owners we speak with are well aware that selling a business can lead to fairly significant tax bills, including capital gains tax and possible estate taxes—and these can eat into your total proceeds from the sale. Organized planning aims to develop strategies to effectively manage your taxes, which in turn helps you keep as much of your hard-earned profit as possible.
Basically, you may be able to save a substantial amount of money and increase the net proceeds from your sale. To make the most of your business sale, consider consulting with tax professionals early to strategically plan and potentially reduce these tax liabilities.
Manage Your Risks
It’s impossible to talk about exiting your business without talking about risk. The fact is, selling a business always involves some risk. What we mean is, markets can fluctuate, tax laws can shift, or the economy can dip. Planning ahead helps you spot these risks early so you can prepare to handle them more effectively.
Of course, you can’t predict the future—but organized financial planning is the next best thing to help you better handle whatever comes your way. You can set up financial safety nets, like emergency funds or insurance policies, that may help lessen the impact of these risks. With the help of trusted financial advisors, you can pinpoint potential risks and prepare a solid backup plan.
Pick the Right Time to Sell
It goes without saying that when you sell your business can be just as important as how you sell. With organized financial planning, you can better track market trends and understand your business’s performance—two key items that can help you pick the best time to sell. At the end of the day, selling at the right time can mean a faster sale at a better price.
Collaborate With a Professional Team
All that said, selling a business successfully often means working with a team that includes specialists in accounting, tax, and wealth management. This team approach helps you look at multiple angles of the sale, which typically leads to smarter decisions and a smoother process. If you’re looking to master the art of selling a business, consider assembling a team of professionals who coordinate and collaborate closely to help you through the sale—from start to finish.
Partner With Us for a Smooth Transition
When it comes to preparing your business for sale, you’ve explored all that organized financial planning brings to the table—the crucial steps and key advantages. Now you’re well-equipped with the knowledge on how to optimize your business’s value, manage tax liabilities, and better navigate potential risks. But understanding these concepts is just the beginning. The next step? Putting them into action.
If you’re ready for this next step, our team at Bernath + Rosenberg is here to guide you—from early planning to a successful sale. With our Certified Public Accountants and CERTIFIED FINANCIAL PLANNER™ professionals, we stay current with the latest in tax laws and financial planning strategies to help you plan for a smooth and confident transition.
To get started and make the most of your hard work, schedule a meeting by calling (212) 221-1140 or email tstricker@brwealth.com.
About Ted
Ted Stricker is a partner and financial advisor at Bernath + Rosenberg, a full-service accounting, tax, and wealth management firm with offices in New York City, Monsey, NY, Lakewood, NJ, Cedarhurst, NY, and Miami Beach, FL. The firm demonstrates a personalized approach to custom-tailored solutions and an unwavering commitment to client service. With over 26 years of experience in the financial services industry, Ted manages the firm’s wealth management team, and specializes in designing financial plans for business owners and affluent families. Since joining the team in 2015, he provides practical and sound advice, combining innovative approaches and solutions that reflect clients’ personality, lifestyle, and goals.
For the ninth year in a row, Bernath + Rosenberg has been named as one of the leading CPA firms in financial planning by Accounting Today, a publication that receives hundreds of submissions each year and features the Top 150 Firms in the nation. Ted is a CERTIFIED FINANCIAL PLANNER™ practitioner and is a member of the Financial Planning Association. To learn more about Ted, connect with him on LinkedIn.
