One of the most important things to understand about selling a business is that this is not a decision that should be made lightly. This is true both in terms of who you sell to and with regard to what will happen to your finances after all is said and done. You need a solid financial plan in place ahead of time to not only make the most of the sale, but to guarantee that you’ll have everything you need to live as comfortably as possible moving forward. The Art of Selling Your Business By far, the most important step that you can take in terms of selling your business actually occurs before the sale even happens: planning ahead. When you sell your organization, especially if you’re lucky enough to do so for millions of dollars, you generate enough of a profit to live comfortably for several years. But you need to be forward-thinking in terms of how you maximize those profits with regard to the taxes you’ll be required to pay. A great strategy for long-term investors is QSBS stock exclusion, which permits shareholders of certain qualified small businesses to exclude a significant portion or all their associated capital gains when selling or exchanging that stock if they’ve held it over five years. The point is that you’re maximizing the income that you’re actually making from the sale of your company, which ultimately should be the goal of any entrepreneur. So planning ahead can literally save you millions in tax liability and higher take-home cash. QSBS is just one example of possible tax strategies. Another critical step to take after selling your business involves evaluating all healthcare options available to you. In a lot of situations, entrepreneurs will sell their company prior to the age of 65 — meaning before they are eligible for Medicare. Depending on the nature of the sale, they may be able to stay on a company-sponsored health insurance plan. They may also be able to get coverage through a spouse who is still employed. But if neither of these things is true, they’re likely going to need to find coverage on the open market — something that can amount to thousands of dollars every year. This is why working with insurance brokers and other financial professionals is key because it can help make sure your health insurance needs are taken care of within the context of the impending business sale. It’s critically important to think about this if you also have a chronic health condition like diabetes. It may not seem like a big expense prior to the sale, but health conditions come with doctor’s visits, expensive prescriptions, etc. You need to make sure that you’re not being short-sighted — that you’re getting the necessary care you need while still maximizing the profits from the sale at the exact same time. Finally, when it comes to taxes, it’s also important to look at a charitable donation strategy — especially if you’ll be cashing in company stock as you exit the business entirely. Making a significant charitable donation during the same year in which you sell your company is hugely beneficial as it can help counteract much of the regular income taxes that you would be forced to pay as a result of the transaction. In the end, selling a business is never an easy decision. You’ve devoted a significant portion of your life to building something special — parting with it is always going to be difficult. But from the financial side of the equation, so long as you follow a few key best practices, you’ll be able to enjoy all of the benefits of this process with as few of the potential downsides as possible. If you’d like to find out more information about what happens in the wake of selling your business, or if you just have any additional questions that you’d like to go over with someone in a bit more detail, please don’t delay — contact us today.