Category: Exit Planning Process

When business owners prepare to sell their company or bring on a new equity partner, the conversation naturally gravitates toward multiples, deal structure, and purchase price adjustments. While these are important, one factor that can be underexamined until it creates problems is organizational culture.

Business owners who are considering selling their company and have charitable intentions can implement a few strategies to make the transaction tax efficient. One strategy often overlooked is donating shares of the company to charity before the sale.

Selling a business represents a significant decision for any business owner, often embodying the culmination of years, if not decades, of hard work and dedication. As owners approach a potential sale, one of the most pressing questions beyond valuation or deal structure is understanding what their involvement will be once a transaction is complete.

Initially conceived by the Economic Innovation Group (EIG) and formally established by the Tax Cuts and Jobs Act of 2017 (TCJA), Opportunity Zones serve as an economic development initiative enabling investors to channel capital into underserved areas across the United States.

Deciding to sell a private business is one of the most significant choices a business owner will ever face. This is particularly true for those in the lower middle market, where businesses typically range in value from $5 million to $100 million. The stakes are high, and the process can often be complex. However, a well-crafted exit plan can help maximize the business’s value, mitigate risks, and ensure a smooth transition to the owner’s next chapter—be it retirement, a new venture, or simply reaping the benefits of their hard work.

For business owners looking to sell their company, there are more factors to consider than simply finding the right buyer at the right price. To accomplish a successful transaction, goals should be set to define what success is.

Business succession planning needs to be an integral part of any private or family-owned business.  It is an important and evolving process that requires thoughtfulness and ongoing attention from the owner. This is not a task to be put off until later. To be done successfully, it needs to be a consistent part of a company’s business strategy and operations. Doing so can increase the confidence of buyers and potentially maximize the amount they are willing to pay for the company.