How Do I Sell My Company?

How Do I Sell My Company?


As a business owner, the thought of selling your company can be a scary one.  You’ve spent countless hours building something, and it is time to “hand over the reins”.  You may have concerns about the valuation being what you thought it would be, the taxes you’ll have to pay, and what your life could look like afterward.  It is a time that is full of questions, and it is difficult to know where to start.


To add to the technical difficulties involved in selling a company, you may be concerned about what to do with the funds after you receive them and how much you will be able to spend in retirement.  As a successful business owner, you’ve earned the right to have clarity about your financial future, but oftentimes, it is difficult to obtain.  This lack of clarity can cause unnecessary stress and keep you from doing the things you’d like to be doing. 


As high-net-worth financial advisors, we understand the situation you are in.  We have helped countless business owners and families clarify their financial picture.  When your vision is clear, your decisions are easy.  By sitting down and discussing your goals with your financial planner, you’ll be better able to determine the right path to take when selling your company.  It starts with a conversation about where you want to go, then developing a process to help you get there. 


This 3-step framwork can help you.


Step 1: Find Your Why


This may sound overly simplistic, but this is a very important piece of the puzzle.  You may wish to sell your company to an outside third party for as much as possible and live on those funds through your retirement.  You may, however, want to gift the company to a family member in a way that sets them up for success.  Often times, there is a mix of both of those ideas where you need to realize the value in your company to have enough funds to make it through retirement, but you are passing the company on to someone you care about and want them to be successful as well.  This is commonly the case for a sale to a family member, key employee or co-owner.  Each of these options present a different set of planning concepts and sale options, so knowing the end goal is the starting point of the process. 


Step 2: Find Your Who


As the old saying goes, “It takes a village to sell a business” (or something like that).  You know your business better than anyone else does, but you may not have sold many companies during your lifetime.  Your expertise in the nature of your business combined with the skills of the right advisory team is what will put you on the right track to selling your company successfully.  The right team can provide the right type of structure for you to maximize your after-tax value and also limit your risk going forward.  Here are some of the members of a proper “deal team”.

  • Financial Advisor
    • A quality financial advisor is one who acts as a fiduciary and helps make sure that your goals and concerns are considered throughout the entire process. 
    • After they know what your goals are for retirement and how much you will need to spend to reach those goals, they can help determine the minimum after-tax amount you need from the sale of your company.
    • When looking for an advisor, find someone who you trust and who cares about seeing you succeed.  Additional certifications like CPA designations, CFP® designations, and advanced degrees in finance are great benefits for high-net-worth families going through these types of transitions, so it may be beneficial to look for those as well.
    • A high-quality advisor will most likely have navigated this process many times before, and they can also connect you to some of the other important teammates for the sale process.
  • CPA
    • Having a capable CPA is a must-have in order to help with the planning around the sale of the business.  More important than the number you agree to sell your company for is the after-tax equivalent of that number.  That is the amount you actually get to keep and apply toward your future goals after the sale is finalized.  A quality CPA can help you maximize that number.
    • A common consideration during the sale process is whether the sale should be an asset sale or a stock sale.  These have very different tax consequences, and having the right CPA in your corner can be a huge benefit. 
  • Corporate Attorney
    • The right corporate attorney is also a key member of the transaction team.  The right attorney will be able to offer good advice for the right structure of the deal as well as drafting all of the necessary documents to accomplish it. 
    • The right corporate attorney will also help you minimize the risk that you are exposed to, both during and after the sale of your company.  You don’t know what you don’t know, and when it comes to selling companies, what you don’t know CAN hurt you.
  • Business Broker / Investment Banker
    • If you already have a buyer lined up, this party might be less critical for you, but in the cases where you need to locate a buyer for your company, a high-quality business broker or investment banker can be extremely helpful in this process.  Whether you use a business broker or an investment banker will depend on the details of the transaction and the size of your company. 
    • Quality business brokers and investment bankers are also important to bring in well in advance to the sale of the company.  That way, they are able to suggest some adjustments that may help you get more money for the sale of your business. 
  • Banker
    • Typically, it is the buyer who will be needing a banker, but you may need to interact with a banker as well.  An example is if you are not the only owner and you are selling to your partners.  In this case, you would still be heavily involved with the banker, and it is important that you have the right one selected. 


Step 3: Find Your How


When you have the “Why” and the “Who” figured out, the “How” comes fairly naturally.  Having an exit strategy is an important piece of a successful business sale.  Once you have a team of professionals around you who understand where you are trying to go and why, they will be able to talk you through the different options you have and show you the benefits, drawbacks, and implications of each of them.  Depending on the type of company you are selling and the deal structure, there are several versions of an exit that may take place.


The Clean Break


If you are selling to an outside party who is finding their own financing and there isn’t a large need for you to help with the business operations going forward, it may be possible to sell your company and stop working all at once.  As the seller, you may prefer this.  Many times, however, the buyer wants the seller to work for a period of time to help ensure that the company can sustain itself without you there. 


The Consulting Period


In situations where a clean break is not necessarily an option and you are not wanting to work for several more years as an employee of the company you once owned, you may be able to provide a consulting period to the new owner.  This could be several months or several years, depending on the company.  The further in advance you plan and prepare your company for sale, the shorter this period will need to be.  Things like process documentation, a good CRM system, and a quality company culture can help shorten the time frame that you are needed after the sale.


The Continuity Plan


The continuity plan works well for business owners who are able to plan in advance and set up a business transition model that puts them on the path to success.  Typically, this requires “grooming” someone with a longer time frame than you to become the next business owner.  By planning ahead and selling ownership to them over time, not only are they are more motivated to continue growing the company, but you are still able to capitalize on the growth of your company until retirement. 




Selling a company is a difficult task, but planning ahead and putting the right team around you can help you get both the terms and the price you are looking for.  Putting together the right team can help give you the clarity needed to make the best decision to meet your personal goals.


As high-net-worth wealth managers, we have helped many clients navigate this complicated process.  Our passion is in helping people gain the clarity they need to make the best decisions possible.  If you would like to schedule a discovery meeting to discuss your goals and see if we can help you, give us a call.  We’d love to help put you on the path toward a successful retirement.






p.s. Our discovery meeting is free!  There is no obligation to work with us afterward – we just want to add value and be a resource for you through this process.