Business owners face several considerations, requiring careful planning and expertise. Engaging a professional team, including a financial advisor and tax professional, to collaborate on your behalf can help identify opportunities and navigate complexities unique to your situation. Here are some key considerations:
Sale of the Business: Business owners must weigh the pros and cons of each type of sale, whether to an internal or external buyer, as each type has distinct tax implications and impacts on their financial goals.
Sale of Assets or Stock: Business owners should review each type of sale, as they have unique tax consequences, liability assumptions, and market considerations that may influence the outcome.
The 5 Ds (death, disability, divorce, disagreement, and distress): Business owners should consider contingency plans for unexpected scenarios to safeguard their personal and business future.
Business Valuation: Business owners should regularly assess the value of their business, especially as they plan their company exit. Advanced strategies, such as accelerating business value, can help enhance their financial position and assist in a smoother transition when the time comes.
Managing taxes: Monitoring taxes and identifying opportunities to reduce tax liability is an ongoing task for business owners that can affect their financial health while operating the business and preparing to exit or sell it.