Academic Finance Research and Insights

When an owner sells their business, the IRS and state taxing authorities will be there to take as much of it as they lawfully can. This one tax bill can be the single largest tax payment an owner will ever make and may represent over a third of their entire net worth. Furthermore, it comes after years of paying income/payroll taxes, working harder, and generally taking more risks than non-business owners. And when an owner wants to retire, the process is significantly more complicated than an employee who simply has to give a few weeks’ notice and maybe rollover a 401K. That’s because a business owner’s life’s savings is locked up in the value of their business. In fact, selling their business IS their retirement plan. So, accessing that wealth at the best possible price, in a way that is tax and cost efficient, is critical to their retirement. In this article, we introduce a unique service offering that can significantly reduce the impact of taxes and increase the price when selling a business. We’ve designed it to be used by business owners and their financial advisors (Wealth Managers, CFP’s, M&A Advisors, CPAs, etc.). If you are a business owner, or operate on behalf of business owners, read on.