Breckenridge Team Business Sale Considerations

Deciding when and how to sell a business are two of the most important decisions business owners make. Below is a list of items that are critical to take into consideration in the process. While some items may be uncomfortable to think through, it is so important that proper planning and conversations be had in order to successfully transfer the business, employees and property to the new owner while maintaining the highest value possible for your asset. Contact the Breckenridge Team today to talk through these items and start charting your path forward.

Establish a timeline for desired time of sale. What needs to happen within the business to make it most attractive for a sale?

• Has an M&A attorney and business broker been identified yet to help verify and address these matters?
• Is the owner keeping track of buyer inquiry calls and contact details?
• What is the estimated cost basis in the business? This is important in order to understand the taxable capital gain that could result from a sale.
• If applicable, will any real estate and physical buildings be included as part of the sale?

What kind of sale is appropriate?

• Third party sale? To a family member?
• Does anybody within the company have the expertise to run the organization? Do difficult conversations need to be had to align expectations with current family members or other key company executives?
• Does an incentive plan for key employees to stay on during a transition period make sense?
• Do you want to maintain any level of ownership in the company?
• What is the preference on an upfront cash payment versus installments? Discuss tax considerations with CPA.

Consider family estate planning.

Does it make sense to gift shares in the company to other family members to get some of the monetized sale value out of the primary owner’s estate? This may be particularly relevant in light of legislative estate planning changes down the pike and today’s higher estate tax exemption amounts. It needs to be done as far in advance of a company sale as possible.

Very important: How much does the primary owner need to satisfy living expenses for the rest of his or her life? This should be analyzed and known in advance of any transfers being made.
• Discuss options with an estate planning attorney well in advance of any letter of intent (LOI) being put on the table.
• Does any premarital or postnuptial planning make sense for the primary business owner or other family members?
• Can family members handle a large influx of cash or should there be other provisions in place?
» Should any education take place in advance of the gift/sale?

Consider charitable goals and establishing a Donor Advised Fund, Family Foundation or other Charitable Trust in the year of the business sale.

Very important: How much does the primary owner need to satisfy living expenses for the rest of his or her life? This should be analyzed and known in advance of any transfers being made.
• Discuss pros and cons of a Donor Advised Fund, Family Foundation and other Charitable Trust options.
• Does it make sense to gift shares of the company to a charitable entity prior to a sale?

Consider post retirement goals and objectives.

We like to say that retirement isn’t about moving away from something; it’s about moving toward something. For business owners who have spent so much time and energy growing their beloved asset, having a plan for the post ownership years is incredibly important.

• How will you fill your time in retirement and where do you want to spend your time?
• Will you spend more time with grandchildren and other family members?
• Do you want to continue consulting with the company and/or serve on the board for some period of time?
• Does a state of residency change fit in with your objectives and make sense to reduce the state income tax burden?

If you have more questions, please reach out to our team at

© 2022 Moneta Group Investment Advisors, LLC. All rights reserved. The information contained herein is for informational purposes only, is not intended to be comprehensive or exclusive, and is based on materials deemed reliable, but the accuracy of which has not been verified. Examples contained herein are for illustrative purposes only based on generic assumptions. Given the dynamic nature of the subject matter and the environment in which this communication was written, the information contained herein is subject to change. This is not an offer to sell or buy securities, nor does it represent any specific recommendation. You should consult with an appropriately credentialed professional before making any financial, investment, tax or legal decision. Past performance is not indicative of future returns. All investments are subject to a risk of loss. Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets. These materials do not take into consideration your personal circumstances, financial or otherwise.


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