Move through a transition
The number you sell for matters less than what you keep
Two owners can sign the same purchase price and keep different amounts, sometimes by a wide margin. The difference is structure, timing, and planning that happened years earlier.
In one paragraph
Business exit planning prepares an owner and a company for a sale or transfer: understanding what the business is worth to a buyer, how deal structure changes the after-tax result, which planning steps must happen well before a letter of intent, and whether the proceeds actually support the life the owner expects afterward.
The problem
Most owners plan the sale and not the aftermath
For many owners, the business is the majority of net worth, the primary income, and a large part of identity. A sale converts all three at once, and the conversion is far less reversible than the years of building that came before it.
The expensive surprises cluster in a few places. Purchase price is not proceeds: structure, allocation, escrow, and earnouts determine what you actually receive and when you are taxed on it. Pre-sale planning that could have helped often becomes unavailable once a letter of intent exists. And the number that felt life-changing can look thin once it has to replace an income for thirty years.
None of this argues against selling. It argues for starting three years earlier than feels necessary.
What we actually do
The work, item by item
- 01
Find the gap between your number and the market's
Owners usually have a figure in mind. Establishing what a buyer would likely pay, and why, turns that figure into something you can plan around or work to close.
- 02
Work backward from the life you want after
We calculate what the proceeds need to produce to fund your spending for decades, then compare it to the expected deal. Sometimes the answer is to wait two years. That is a useful answer to have early.
- 03
Understand structure before you negotiate it
Asset versus stock sale, purchase price allocation, seller financing, rollover equity, and earnouts all change your after-tax result. Knowing this before the term sheet arrives changes what you ask for.
- 04
Use the pre-LOI window
Certain gifting, trust, and charitable strategies depend on being implemented well before a sale is imminent. Their availability narrows sharply as a deal approaches, which is the strongest argument for early planning.
- 05
Reduce the buyer's reasons to discount you
Customer concentration, owner dependence, and messy financials all show up as a lower multiple. Several of these can be improved with a two-year runway.
- 06
Run the deal with one coordinated team
Your M&A attorney, CPA, and banker each hold part of the picture. We keep the pieces in one conversation so your personal outcome is being managed alongside the transaction.
An example
Three years, not three months
An owner takes a call from a buyer and six weeks later has a letter of intent. The price is good. The structure is not: most of it hangs on a two-year earn-out, and the tax treatment of the fixed portion is worse than it needed to be.
The work that would have changed that had a three-year lead time. Financials a buyer does not discount for. A management team that survives the founder leaving. Personal assets built outside the company so the deal is not carrying the entire retirement on its own. Ownership arranged before there is a buyer at the table, because moving it afterward is expensive and sometimes not possible at all.
Nobody starts this three years out, because three years out it feels premature. It is also the last point at which most of the levers still move.
A composite illustration, not a specific client. Your situation and results will differ.
Further reading
Where this comes up in more detail
Not every owner is selling to an outside buyer. If you are instead weighing handing the business to family or a management team, our guide to business succession planning covers how that decision, and its tax treatment, differs from a sale. For a closer look at the valuation, deal structure, and tax questions in the sale itself, see our business exit planning guide for owners. If the question is simply how much of the price an owner keeps, our worked example of a $5 million sale follows one deal through to estimated after-tax proceeds.
Free tool
At what age does work become optional?
The question most people ask late and quietly. It has a specific answer, and five inputs will get you close enough to know whether the date is where you assumed. If a business is the asset that funds it, there is a field for what a sale would net.
- Age today
- 45
- Invested
- $1,200,000
- Added each year
- $90,000
- Spending target
- $180,000
- Work becomes optional
- 61
Straight answers
Business exit planning: common questions
Three years is a reasonable target, and five is better. The reason is not the transaction itself but the planning that has to precede it: improving the metrics a buyer prices, and implementing gifting or trust strategies that need to exist well before a sale is on the table. Owners who start after a letter of intent still benefit, with a meaningfully shorter list of options.
Deal structure and the tax treatment that follows from it, usually decided under time pressure. Purchase price allocation, whether the transaction is an asset or stock sale, and how earnouts and escrow are handled can move the after-tax result substantially on an identical headline price. The second most common issue is having no plan for the proceeds, which leaves a large sum sitting undeployed.
Work with them. Your M&A attorney handles the transaction and your CPA handles the tax filings; neither role is ours. What is frequently missing is someone holding your personal financial outcome across the whole process and making sure the three sets of advice fit together. That is the seat we sit in.
Related
These usually come up alongside it
- What this involves →
IPO & acquisition planning
Most of the decisions worth making about an IPO or acquisition have deadlines that pass before the money arrives.
- What this involves →
Tax strategy
Most tax advice assumes you own a business. When your income is a paycheck, the levers are fewer, and using them depends entirely on timing.
- What this involves →
Estate & legacy
Most estate problems we find are not missing documents. They are documents that no longer match the accounts, the titling, or the family.
This material is for general educational purposes only and is not intended as tax, legal, or investment advice. Neither GGM Wealth Advisors nor Cambridge provides tax or legal advice. Please consult a qualified professional about your specific situation. Estimates are illustrative, based solely on the figures you enter and simplified assumptions. Your actual results will differ.
Let's start with a conversation
Bring whatever is on your mind: a vest date you are unsure about, an offer you are weighing, a business you might sell in three years. Nothing to prepare, no cost, and you will leave with something useful whether or not we end up working together.