Why you should begin planning now
Most business owners don’t think much about their exit strategy until they’re ready to sell, retire, or pass the business down. And by then, they’ve usually missed out on some big opportunities to set themselves up for the best outcome.
The truth is, the choices you make today—how you structure your business, handle taxes, and manage your financials—will determine how smooth (and profitable) your exit will be. Whether you plan to sell, pass it down to family, or just close up shop, a little planning now can save you a whole lot of money and hassle later.
How you leave affects your taxes—big time!
There’s no one-size-fits-all exit plan. The right approach depends on where your business is headed. Here’s a look at some common paths and the tax moves that go with them:
1. Selling to a buyer
If you’re planning to sell in the next five years, the way your business is set up now will impact how much you actually keep from the sale.
- Certain types of businesses (like C-Corps) may qualify for major tax breaks, like avoiding capital gains taxes on stock sales.
- Spreading payments out over time (installment sales) can lower your tax hit in any given year.
- A clean set of books and solid profits make your business more attractive to buyers—and make due diligence way easier.
2. Passing on to family
Handing the business off to the next generation? You don’t want taxes eating into what you’ve built.
- Gifting shares over time can help reduce estate taxes down the road.
- There are smart ways to structure ownership that keep the business in the family without triggering unnecessary tax bills.
- If you own real estate as part of the business, you’ll want a plan in place to avoid costly tax consequences.
3. Closing the business
Even if you’re planning to simply wind things down, there are still tax and legal steps to take.
- Selling off assets? Be ready for capital gains taxes.
- Some closing costs (like breaking a lease or liquidating equipment) could be tax-deductible.
- If you don’t formally dissolve the business the right way, you could run into tax headaches down the road.
Do this now to make your exit smoother
Most business owners wait too long to think about this stuff—and it costs them. Here’s how to get ahead of it:
✅ Figure out what your business is worth – Even if you’re not selling yet, knowing your value helps with long-term planning.
✅ Talk to a tax pro – The right tax strategy can save you thousands (or more) when it’s time to exit.
✅ Keep your financials clean – Messy books turn off buyers and create problems when passing the business to family.
✅ Make sure your business structure fits your plans – The way your business is set up now could cost you big time later if it’s not aligned with your exit goals.
✅ Think long-term about taxes – Many of the best tax strategies need to be set up years in advance, not months before you leave.
Plan now, thank yourself later
No one likes to think about leaving their business, but the sooner you plan for it, the better off you’ll be. Waiting until you’re ready to walk away means missing out on smart tax moves and financial strategies that could put more money in your pocket.
If you want to make sure you’re setting yourself up for the best exit possible—whether that’s five years from now or 20—let’s talk. A little planning today can make a huge difference when it’s time to move on.
