Selling a business is rarely as simple as agreeing on a number, signing a contract and depositing a check.

The number at the top of the offer is not necessarily the amount you will keep. Taxes, debt, transaction structure, seller financing and other obligations can significantly change the outcome. By the time an offer arrives, many of the strategies that could have improved that outcome may no longer be available.

That was the focus of a recent Ask the CFO conversation with Chris Clepp, founder of Building Towards Wealth. Chris works primarily with business owners, helping them make smarter financial decisions, preserve more of what they have built and prepare for the next chapter of their lives.

Our discussion began with taxes, but it quickly became a much larger conversation about succession, legacy, business value, insurance and the importance of planning before a transition becomes urgent.

Your Business Is an Asset, Not Just a Job

Many owners have built successful companies but have never stopped to determine what those companies are actually worth.

They know the revenue. They may know the profit. They probably have a number in mind based on what another owner claims to have received for a similar business.

That does not mean they understand the real value of the company or what they would receive from a sale.

For many owners, the business represents most of their net worth. Yet they continue to operate it as a job that depends almost entirely on them. Every important decision, customer relationship and operational question still passes through the owner.

That creates a serious problem when it is time to sell.

A buyer may not see a self-sustaining business. The buyer may see a company that loses a large part of its value when the owner leaves.

Building a valuable business means creating systems, developing leaders, delegating responsibility and reducing the company’s dependency on one person. Those steps improve the business today, regardless of whether you plan to sell next year or ten years from now.

Begin by Defining “Enough”

Before you negotiate a sale, you need to understand what you are trying to accomplish.

What will be enough to support your family, lifestyle and plans for the future?

That number is personal. It should not be based on what another business owner received, a multiple mentioned at the country club or a headline about a major acquisition.

It should be based on your actual life.

Once you know what enough looks like, you can work backward. You can determine whether the current value of the business is likely to produce that result and identify the gap between where you are and where you need to be.

That gap may be closed by increasing the company’s value, building assets outside the business, reducing risk or changing the structure of the eventual transaction.

Without that calculation, you are negotiating without knowing whether the deal will actually meet your needs.

The Sale Price Is Not the Amount You Keep

One of the biggest mistakes owners make is focusing entirely on the gross sale price.

A $10 million offer does not mean the owner will walk away with $10 million.

Business debt may need to be repaid. Taxes will need to be calculated. Transaction costs may apply. Part of the purchase price may be tied to future performance, retained in the company or financed by the seller.

The structure of the transaction also matters.

An asset sale and a stock sale can produce very different tax results for the seller and the buyer. The buyer may prefer one structure while the owner benefits from another. Those differences can have a six-figure or even larger impact on the final outcome.

The right question is not simply:

“How much is the buyer offering?”

The more useful question is:

“How much will I actually have after the transaction is complete?”

That number needs to be modeled before negotiations become serious.

Planning After the Offer Is Usually Too Late

Chris repeatedly returned to one central point during our conversation: the most effective exit and tax strategies often require time.

Some need several years of runway. Others require changes to ownership, entity structure, trusts, real estate or other assets. Those changes may need time to become effective and withstand scrutiny during a transaction.

Once a letter of intent has been signed, many options may already be gone.

Owners often approach an advisor after receiving an offer and ask how to minimize the tax consequences. At that point, the advisor may be able to improve certain details, but the largest planning opportunities may no longer exist.

You cannot wait until after the accident to buy insurance.

The same idea applies here. Exit planning should begin before you believe a sale is imminent. For many owners, that means thinking three to five years ahead, even when they are not currently planning to leave.

Your CPA Must Be Looking Forward

A good CPA is an essential member of the advisory team, but not every CPA provides the same type of service.

Preparing an accurate tax return is different from modeling a future transaction.

Tax preparation is generally backward-looking. It reports what happened during the previous year.

Exit planning is forward-looking. It considers how decisions made today may affect what happens several years from now.

If your CPA only contacts you to gather information for the annual return, you may need additional strategic support before a sale. That does not necessarily mean replacing the CPA. It may mean assembling a broader team that includes the CPA, attorney, financial advisor and fractional CFO.

The important thing is that those advisors work together.

A strategy that reduces this year’s tax bill may create a liquidity problem later. An estate-planning recommendation may conflict with the transaction structure. A financial strategy may not support the owner’s actual cash needs.

Each advisor may be providing reasonable guidance within one area, but the complete plan still needs to work as a whole.

Review the Entity Structure Before a Buyer Does

Many owners selected their entity structure years ago and have not revisited it since.

The company may have changed dramatically during that time.

The business may now own intellectual property, equipment or real estate through multiple entities. There may be a holding company. The ownership may have changed. The entity may be domiciled in a state that no longer makes sense for the company’s plans.

Those decisions can affect taxes, due diligence and the attractiveness of the transaction.

Real estate can create an additional complication. Some owners hold the operating company and property separately, which may provide advantages. However, the buyer may not want the property, may require a specific lease arrangement or may object to the separation.

These are not issues you want to discover in the middle of a deal.

The structure should be reviewed in advance so that the owner understands what is negotiable, what is essential and how each possible structure affects the final proceeds.

The Highest Offer May Not Produce the Best Outcome

A sale is not only a financial event. It is also a personal and emotional transition.

Business owners spend decades building companies, serving customers and employing people. The business may carry the family name. Long-term employees may feel like part of the family.

A buyer offering the highest price may also intend to fundamentally change the business, reduce staff or remove the culture and reputation the owner spent years creating.

That may still be the right decision, but the owner needs to understand the tradeoff.

An employee stock ownership plan, family transition, management buyout or sale to another strategic buyer may produce a lower headline number while preserving more of the owner’s intended legacy.

Knowing what is enough creates more freedom in that decision. It allows the owner to evaluate the full outcome instead of assuming that every last dollar must be maximized.

Money should support the life and legacy you want. It should not make the decision for you.

Succession Planning Is Also Risk Planning

Every owner will eventually leave the business.

That exit may be planned through a sale, family transition or leadership succession. It may also happen unexpectedly because of death, disability, illness or another crisis.

Choosing not to plan does not prevent the transition. It only makes the transition disorderly.

Many owners assume their spouse or family will be fine because they have assets or life insurance. But the family may still inherit a company they do not know how to operate, employees who need answers and customers who are uncertain about what happens next.

A complete succession plan needs to address more than ownership.

It should identify who can operate the business, how ownership will transfer, how the family will receive value and what will happen to employees, customers and partners.

Buy-sell agreements also need to be reviewed regularly. An agreement created years ago may contain an outdated valuation or be supported by insurance policies that no longer match the value of the company.

The document may technically exist while failing to provide the protection the owners think they have.

Do Not Ignore Disability and Key-Person Risk

Business owners frequently think about life insurance but overlook disability.

In many cases, disability may be more likely to disrupt the company than death.

Consider a business with two owners: one manages sales and the other manages operations. If the sales leader becomes seriously ill and is unable to work for a year, the operations leader may be forced to perform both roles.

That person may work without a break, the company may lose revenue and the partnership may become strained before the disabled owner returns.

Appropriate insurance or contingency planning may provide the resources to hire temporary leadership and keep the business operating through the disruption.

Owners should also identify the key people whose absence would create a substantial financial impact. That person may lead sales, oversee a technical function, manage important customer relationships or hold critical operational knowledge.

Insurance is not the answer to every risk. But ignoring the risk is not a strategy.

At minimum, the company should know what would happen if a key person could not work and have a clear response plan.

A Valuable Business Is Prepared for Transition

Two factors regularly reduce the value of privately held businesses:

• Excessive dependence on the owner or one key employee

• Excessive dependence on one customer

A buyer will recognize both as significant risks.

If everything runs through the owner, the buyer may require the owner to remain involved after the transaction or reduce the price to account for the uncertainty.

If one customer represents a large percentage of revenue, the loss of that customer could dramatically change the economics of the business.

Neither problem can usually be solved in the weeks before a sale.

Reducing those risks requires time, intentional leadership development, customer diversification and stronger systems.

That is why owners should run the company as though they may eventually sell it, even when they have no immediate plans to do so.

The result is not only a more valuable business. It is usually a stronger, less fragile and more enjoyable company to own.

Your Exit Plan Is Part of Your Business Plan

The founders who achieve the best results are not always the ones who negotiate the highest sale price.

They are the ones who understand what they will keep, know what they need and begin planning early enough to preserve their choices.

That planning includes more than taxes. It includes the company’s value, entity structure, succession plan, leadership team, insurance coverage, estate plan and the owner’s vision for life after the business.

You do not need to know exactly when or how you will leave.

You do need to acknowledge that a transition will happen and begin preparing the company, your family and yourself for it.

The earlier you begin, the more options you will have.

Chris Clepp is the founder of Building Towards Wealth, where he helps business owners make informed financial decisions, protect what they have built and prepare for greater autonomy.

[Download Chris Clepp’s exit-planning guide]

Learn more about Building Towards Wealth at buildingtowardswealth.com.

About Ask the CFO

Ask the CFO is a free, interactive series hosted by Lowell Mora, founder of Impact CFO. Each session brings business owners and financial experts together for practical conversations about the decisions that shape profitability, growth, succession and long-term business value.

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