Start years before you expect to sell. For most owners, the business is the largest asset they will ever own, and they sell it only once. The decisions that most affect what you keep, and what comes next, are usually made two to three years or more before a buyer appears.

Two to three years or more before the sale

  • Know your number. Before asking what the business is worth, ask what you need: the after-tax proceeds required to fund your retirement, your family’s goals, and your giving.
  • Get an independent valuation. It shows what a buyer is likely to pay, and whether there is a gap between that figure and your number that needs closing before you sell.
  • Understand your exit options. A sale to an outside buyer, a transfer to family, a management buyout, and an employee stock ownership plan (ESOP) each come with different prices, tax treatment, timelines, and legacies.
  • Assemble the team early. A well-run exit usually involves a CPA, an M&A attorney, an estate planning attorney, an investment banker or business broker, and a financial advisor. Decide who coordinates them, so the advice arrives as one plan.
  • Ask about tax and estate strategies early. How your company is structured, whether your shares might qualify as qualified small business stock, and whether gifts to family, trusts, or charitable strategies fit your family are questions for your tax and legal advisors. Many of these only work if they’re in place well before a deal is signed. Courts have taxed owners on the gain from shares given to charity when the sale was already all but certain.
  • Get sale-ready. Clean financial statements, documented processes, a capable management team, and a business that runs without you support a smoother sale.
  • Check your own readiness. Owners who know what they’re moving toward, not just what they’re leaving, tend to negotiate with more clarity.

During the sale

  • Structure matters as much as price. In an asset sale, the buyer gets a new tax basis in what it buys, and how the price is divided among the assets can make part of your gain taxable as ordinary income. In a stock sale, the buyer acquires the company itself. An earnout, a seller note, or rollover equity can change both your after-tax result and your risk. Compare offers on modeled after-tax proceeds, not the headline number.
  • Keep running the business. Deals commonly take months to close, and declining performance in that window can lead to a lower price or a lost deal.
  • Protect confidentiality, and pace yourself. Word of a sale can unsettle employees, customers, and vendors. Let your advisors carry the weight of negotiation.

After the sale

  • Pause before major decisions. There is rarely a penalty for moving deliberately.
  • Reserve for taxes first, including estimated payments due before your return is filed.
  • Diversify with intention. You’ve turned one concentrated asset into cash. The move into a diversified portfolio should follow your plan, your timeline, and your tolerance for risk.
  • Update the paperwork. Estate documents, beneficiary designations, account titling, and insurance, including health coverage you carried through the business, usually need revisiting.
  • Plan the next chapter. Owners who do well after a sale usually have a purpose waiting for them, not just a portfolio.

Frequently asked questions

How early should I start?
Two to three years or more before a sale gives you the most options. Some strategies depend on time passing before a deal is signed.
Does Barrett Capital handle the sale itself?
No. We don’t broker sales, give legal advice, or prepare tax returns. We build the personal financial plan that anchors these decisions and coordinate with your tax and legal advisors along the way.

General educational information, not individualized investment, legal, or tax advice. Tax rules change; consult your tax and legal advisors about your situation.