Business Exit Strategies
Much like an army plans its extraction before its invasion – a business owner, in the perfect world, has an exit plan before starting the business. If you have failed to develop an exit plan - do it NOW.
Exiting a business is a taxable event. Regardless of how you do it – sale to an employee or third party, transfer to a family member, as a part of your estate plan, or even walking away and dissolving the business – the IRS will scrutinize the transfer and challenge you for additional taxes. Why? Tax implications include: income, sales, payroll, estate, and inheritance taxes to name a few. When the IRS challenges the transaction or the value of the business and its assets, the amount of cash realized on the sale can be greatly reduced because of the additional tax!
Proper Exit Strategy Planning puts you in CONTROL and avoids IRS surprises
• Exiting a business whether by sale, transfer, bequest, or dissolution is a TAXABLE event
• Learn how an arm's length, third party, certified valuation can allow you to dictate to the IRS how
much your business is worth so you can PLAN the transaction before it happens
• Understand the factors that DRIVE the value of your business
• The structure of the transaction and the language in the sales/transfer agreements DICTATE the
amount of tax you will ultimately pay
• Proper planning can MINIMIZE the tax implications of the sales transaction
• Create tax preferred ADVANTAGES in the sales agreement such as a continued income stream after
• Discover how to ensure MORE money winds up in your pocket
Your Strategic Exit Plan should be coordinated with your Strategic Tax Plan. Knowing and driving the value of your business helps you understand the amount of taxes that will be paid and ultimately how
much you can realistically realize from the sale. How much money will you need to retire and maintain your lifestyle? It's a lot more than you may think. How much money do you need to generate your desired monthly retirement income? No one wants to be forced to re-enter the work force because improper planning created a retirement shortfall. Annual strategic tax planning – beyond a 401(k) or IRA – can permit exponential growth of the monies available when you retire. Unfortunately, most business owners come up well short in this area because of improper tax planning.