The Investment Capital Growth Blog

95% of founders don’t know how to sell their company.

We have spent the last 15 years training Founders like you on how to do it.

Selling a business can be a complex and emotionally taxing process. Many business owners find it challenging to balance the practicalities of selling with the personal significance of what the transaction means for them and their family. However, with proper planning, a business owner can maximize personal after-tax profits, minimize taxes, accomplish charitable goals, and protect assets.

In this article, Cliff Locks explores the steps necessary for a successful sale of a business. I discuss the importance of getting educated. I’ve co-founded the Hyper Accelerator – M&A Program. The Hyper Accelerator is a 100-day global virtual accelerator program that helps founders prepare to sell or merge their companies. The program provides high-quality, actionable advice and insights to teach founders how to maximize the outcome of their exit. The program includes skill-specific workshops to defend your valuation, due diligence, and negotiations, and learn from top M&A professionals and professors from top business schools. The program also helps founders create liquidity for themselves and their shareholders, understand what their company is worth, and coordinate bids and financing arrangements. They have worked with entrepreneurs who have had successful exits, and the program is designed to help founders learn how to sell their companies. To get started, present your startup to one of their M&A expert mentors. You can learn more and enroll here: http://bit.ly/3FZIvM3 You’ll learn about assembling a collaborative team of advisors, building your data room, due diligence,  and implementing various planning strategies to successfully sell your company.

The goal is to successfully close their private transaction tax-efficiently while creating a lasting legacy for their family.

The Importance of a Collaborative Team of Advisors

A successful sale of a business begins with assembling a collaborative team of advisors. This team can include investment bankers, attorneys, accountants, and strategic wealth planning advisors. All these advisors must work together to prepare the business owner for the liquidity event and to maximize the value, speed, and certainty of the transaction closing.

One of the key components of a successful wealth plan is tax planning. The tax implications of a business sale can be significant, and the earlier the business owner starts planning, the more opportunities there are to minimize tax liability and maximize after-tax profits. There are a number of tax planning strategies that can be used to achieve these goals, such as intentionally defective grantor trusts, grantor retained annuity trusts, completed gift non-grantor trusts, incomplete gift non-grantor trusts, and spousal lifetime access trusts.

The investment banker’s role is to identify potential buyers, negotiate and structure the transaction, and ensure that the business owner receives the highest possible purchase price. The attorney’s role is to review and draft the transaction documents, ensure compliance with applicable laws and regulations, and protect the business owner’s legal interests.

The accountant’s role is to provide tax planning and advice, assist with financial due diligence, and ensure that the transaction is structured in the most tax-efficient manner possible. The strategic wealth planning advisor’s role is to integrate tax, estate planning, and business succession strategies to help the business owner achieve their personal and financial goals.

Incorporating Strategic Wealth Planning

Strategic wealth planning is critical for any business owner who wants to maximize the value of their business sale. By combining tax, estate planning, and business succession strategies, a business owner can have the greatest opportunity to maximize the wealth from the sale of their business.

Strategic wealth planning involves analyzing the business owner’s current financial situation, determining their financial goals, and developing a plan to achieve those goals. The resulting savings can be significant, and the earlier the business owner starts, generally, the better the results can be.

Another important component of a wealth plan is estate planning. A business sale can result in a significant increase in wealth, which can have implications for estate taxes. A well-structured estate plan can help minimize estate taxes and ensure that the business owner’s assets are distributed according to their wishes. There are a number of estate planning strategies that can be used to achieve these goals, such as charitable trusts, family limited partnerships, family limited liability companies, and qualified opportunity zone investments.

Asset protection is another key consideration in a wealth plan. A business sale can attract attention from potential creditors, and it’s important to ensure that the proceeds of the sale are protected from legal claims. There are a number of asset protection strategies that can be used to achieve this goal, such as asset protection trusts and estate freezes.

In addition to tax planning, estate planning, and asset protection, there are a number of other strategies that can be used to maximize the value of a business sale.

It’s important to note that there is no one-size-fits-all approach to wealth planning for a business sale. Each business owner’s situation is unique, and their wealth plan should be tailored to their specific needs and goals. That’s why it’s important to work with a team of trusted advisors who can provide personalized advice and guidance throughout the process. You can learn more about the M&A process and enroll here: http://bit.ly/3FZIvM3

In conclusion, selling a business is complex and requires careful planning and preparation. By getting educated and assembling a team of trusted advisors and developing a comprehensive wealth plan, business owners can maximize the value of their sale, minimize tax liability, and achieve their financial goals. Don’t leave any money on the table – start planning for your business sale today.

Let’s talk about your needs: [email protected]

Recent Blog Post: Investing in the Future: Preparing NextGen Successors for VHNW & UHNW Family Enterprise

As a Board of Director for multiple firms and founding three companies, I have seen firsthand the importance of succession planning for both traditional organizations and Family Offices. With my current work supporting VHNW and UHNW Families globally, I cannot stress enough the significance of preparing the NextGen succession planning.

Succession planning is a continuous process that requires careful planning and execution. It is not a one-time event, and it should be integrated into the company’s overall strategic plan and reviewed periodically to ensure its relevance and effectiveness.

The first step in developing a succession plan is to identify the key positions and the necessary skills, experience, and qualities required to perform these roles successfully. Based on this, potential successors for these positions should be identified, evaluated based on their performance, potential, and leadership skills.

Once potential successors are identified, the Board should develop a training and development plan that is tailored to each individual’s strengths and weaknesses. This may include job rotations, mentorship programs (which I can provide as a resource), and a combination of internal and external leadership training courses.

One critical aspect of succession planning is ensuring that the company’s culture and values are passed down to future NextGen leaders. To achieve this, the Board should work with current leaders to document the company’s culture and values and ensure that these are integrated into the training and development of potential successors and family members.

In the event of unexpected departures or emergencies, succession planning also involves developing contingency plans. The Board should identify potential NextGen interim leaders and family members, and develop plans for the smooth transition of leadership.

In conclusion, it is essential for Family Office Leadership and the Board to have a robust succession plan in place. By identifying potential NextGen successors, developing tailored training and development plans, and ensuring that the company’s culture and family values are passed down to future leaders, the Board can ensure the continuity of leadership and maintain the stability of the organization. Let us work together to make succession planning a top priority for our organizations and Family Offices.

Let’s talk about your needs: [email protected]