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Selling a business is often the biggest financial event of an entrepreneur’s life. Whether it’s a decades-long family company or a fast-growing startup, the decision to sell brings both opportunity and complexity. Amid the excitement of closing the deal, it’s crucial not to overlook the planning that must take place before and after the transaction.

From minimizing taxes to ensuring long-term income, financial planning after a business sale can be the difference between fleeting windfall and lasting wealth. At RIA Advisors, we help business owners navigate the sale process with clarity and confidence. Here’s what you need to know to make the most of this pivotal moment.
 

Before the Sale: Prepare to Preserve
 

1. Start Planning Early

Ideally, financial planning should begin 12–24 months before the sale. This allows time to optimize ownership structure, assess valuation, and explore strategies for minimizing tax liability.
 

2. Engage a Team of Experts

Selling a business requires a coordinated effort. You’ll want to build a team that includes:

• A fiduciary financial advisor to align sale proceeds with long-term goals
• A CPA or tax strategist for transaction structuring
• A business attorney to guide legal negotiations
• An estate planning attorney if the sale impacts legacy goals
   

3. Evaluate Ownership and Entity Structure

Your business entity (LLC, S-Corp, C-Corp) can significantly influence how your proceeds are taxed. For example, C-corporations may face double taxation, while S-corporations may allow for more favorable treatment. Transferring shares into a charitable remainder trust (CRT) or other estate tools before the sale may help mitigate capital gains.
 

4. Model Liquidity Scenarios

How much do you need from the sale? What should be reserved for taxes, reinvestment, or gifting? Liquidity planning ensures you walk away with a strategy, not just a lump sum.
 

After the Sale: Protect and Reallocate
 

1. Plan for Taxes Immediately

Selling a business tax planning is essential. Capital gains taxes can take a substantial bite out of your proceeds if not managed wisely.

Some strategies to consider include:

• Installment sales: Spreading income over time to avoid a high one-year tax hit
• Opportunity Zone investments: Deferring or eliminating capital gains by reinvesting
• Donor-Advised Funds (DAFs): Offset gains with charitable contributions
• Charitable Trusts: Create income streams and leave a legacy while reducing taxes

Your advisor and CPA can help tailor the right mix of strategies based on your goals and timeline.
 

2. Reassess Your Risk Profile

Your financial world changes drastically after a sale. You may no longer need aggressive growth, but you may need stable income, liquidity, and tax efficiency. Your asset allocation should reflect your new reality.

We often guide clients in transitioning from concentrated business wealth to diversified portfolios with a balance of:

• Taxable accounts for flexibility
• Tax-deferred accounts for growth
• Tax-free options like Roth IRAs (through conversions or planning)
   

3. Establish New Financial Goals

With the sale complete, many former business owners experience an identity shift. Now is the time to revisit your:

• Retirement timeline and spending needs
• Gifting or charitable goals
• Legacy and estate planning priorities
• Lifestyle adjustments or relocation plans

A holistic financial plan ensures every dollar supports a life of meaning, not just maintenance.
 

4. Review Insurance and Asset Protection

With new wealth often comes new risk. Your financial plan should include:

• Umbrella liability coverage
• Asset protection trusts
• Life and long-term care insurance reviews
• Business succession considerations, if other enterprises remain
   

Partnering With the Right Advisor

Whether you’re in the early stages of considering a sale or already negotiating terms, a trusted financial advisor can help you see the big picture. At RIA Advisors, we act as your financial quarterback, coordinating with attorneys, CPAs, and business brokers to help you maximize outcomes before, during, and after the sale.

Our role doesn’t end when the deal closes. We stay with you to build, protect, and adapt your new wealth strategy for the decades ahead.
 

FAQs

What’s the biggest tax mistake business sellers make?

Failing to plan ahead. Many sellers are surprised by the tax burden because they didn’t structure the deal or their estate properly before the sale.

How can I reduce taxes on the proceeds?

Options include installment sales, charitable giving vehicles, Opportunity Zones, and reinvestment strategies. The right choice depends on your goals and timeline.

Should I change my investment strategy after selling my business?

Yes. Your risk profile, liquidity needs, and goals likely shift dramatically after a sale. A new portfolio strategy should reflect that.

How soon should I build a financial plan?

The earlier, the better—ideally one to two years before a sale. But if the sale is complete, it’s never too late to start.

Can I gift part of my business before the sale?

Yes, and doing so may reduce estate taxes and support charitable goals. Timing and structure are crucial—speak with a financial and legal advisor first.

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