Selling your business involves more than just closing the deal. To navigate the complexities of taxes, legal issues, and financial planning, you need a well-rounded team of advisors by your side.
Whether you’re years away from a potential sale or preparing now, getting the right team in place can help you navigate the process effectively. Watch our latest video to gain further insights on how to build your advisory team and plan for a successful business sale.
Transcript
Introduction: Navigating the Complexities of Selling Your Business
Hi, I’m Jeff McClean, co-founder and CEO of Solidarity Wealth in Utah. Today we’re going to talk about an exciting topic: what to do when considering selling your business and how important it is to build the right type of advisor team around you and your family well in advance of moving forward with a business sale. Selling a business is complex and challenging, involving many moving pieces—from tax issues and transition planning to financial considerations and protecting your employees long-term, all while considering the impact on you and your family.
Lessons Learned from Advising Entrepreneurs on Business Sales
Based on our many years of experience advising entrepreneurs and founders during and after a business sale—often their life’s work—we have learned a few valuable lessons. One of the best approaches is to build the right type of professional team of advisors to help you navigate the sale. Instead of hiring just a single attorney or CPA, a team approach can save considerable money, avoid mistakes, and keep you and your family protected throughout the process.
Why You Need More Than Just One Advisor
As a recovering attorney myself, I can attest to the importance of having a great attorney by your side. But you need more than just a single general business attorney to navigate a sale. Let’s discuss the drawbacks of relying solely on one advisor, whether that’s an attorney or a CPA.
The Role of an M&A Attorney in a Business Sale
When selling a business, you need an attorney specializing in Mergers and Acquisitions (M&A). An M&A attorney focuses on structuring and closing deals, compliance, regulatory and legal requirements, and drafting purchase agreements and related documents. While essential, an M&A attorney doesn’t cover all aspects of the sale.
Beyond Legal: Tax Mitigation, Valuation, and Post-Sale Planning
Other critical areas of a business sale include tax mitigation strategies to maximize your net proceeds, valuation and appraisal help, rewarding key employees, and managing cash flow after the sale for you and your family. These considerations require a broader team of advisors.
Building a Comprehensive Team of Advisors
At Solidarity Wealth, we believe in assembling a cohesive team of advisors around our clients. This includes an M&A attorney, a tax attorney, a valuation expert or investment banker, an experienced CPA, and a wealth advisory team like ours. Together, we focus on helping business owners maximize the sale’s value and manage the proceeds for their family’s benefit.
Our Three-Phase Approach to Business Sales
Our approach focuses on three key areas to help business owners through a sale:
- Pre-Sale Planning: Structuring, tax strategies, financial planning, legal entity structure, defining goals, timelines, and assigning team roles.
- Guiding Through the M&A Process: Setting expectations, navigating negotiations, and managing the ups and downs of the sale process.
- Post-Sale Planning: Helping clients transition smoothly and manage the proceeds effectively for the long term.
The Importance of Timing in Business Sale Planning
One of the most common mistakes business owners make is waiting until the year of the sale to start planning. The best-case scenario is starting years in advance to allow for optimal tax and financial planning. Cleaning up financials and structuring the business properly takes time and is essential to making it marketable and maximizing its value.
Start Early and Build the Right Team
Timing is everything. Start early and have a plan for both before and after the sale. By doing so, you’ll position yourself for a successful and smooth business sale.
Solidarity Wealth: Experts in Business Sale Advisory
If you have questions about selling your business or need help building the right team, reach out to us at Solidarity Wealth. This is what we do—we’re experts at advising founders and entrepreneurs through the business sale and exit process, even if you’re years out from the sale. Let’s talk and help you get started on the path to success.
