We have seen countless situations where business owners were forced to exit their business sooner than expected due to a health problem, injury, family matter, or any other myriad of reasons. Our role is to help you create a foundation that will work toward allowing you to exit your business predictably, profitably, tax-efficiently, and most important on your terms.

Strategies for Increasing Valuation

Business valuation is the key factor that determines the strength of your position when you eventually sell your business. Various factors can affect your valuation, including intangibles such as intellectual property, brand, and future viability of the company as going concerns. Everything boils down to the question of how profitable the business will be for future owners when the founders are no longer running the business.

Key Employee Compensation and Succession

Exit planning extends beyond the owner's role. As your business grows, the company depends increasingly on multiple employees in certain key positions. We help owners find ways to compensate their most critical employees in a way that incentivizes long-term commitment to the company, such as "golden handcuffs" or stock options with long vesting schedules. In addition, we evaluate your key person insurance coverage and ensure that a succession plan is in place for each key role. This type of planning also increases the value of your business, ensuring that key people are protected and have a vested interest in staying, following the sale of the business.

Business Sale Structure and Negotiation

When preparing a business for sale, there are various ways to structure the deal. We have to think about tax efficiency as well as what will make the proposition attractive to a buyer. For instance, you may ask to retain a small amount of equity in the company and receive a royalty. You might sell the entire company, or only sell selected assets belonging to the company. All of these factors can give you additional bargaining chips at the negotiating table. Our role is to help you understand what options you have and how best to pursue your objectives.

Deferred Sales Trust (DST)

Did you know that you can defer from taxes up to 100% of the gains on the sale of your business? This is done via a direct transfer at closing of some or all of the sale proceeds into a deferred sales trust, also known as a DST. The DST strategy can be an excellent way of deferring taxes on the sale of a business while creating a consistent stream of income. The DST can also be an effective tax bracket management tool giving you the ability to dictate how much taxable income you'll receive every year. And finally, the DST is flexible allowing you and your advisor to determine how your money is invested congruent with your needs, objectives, other investments, and risk tolerance.

Qualified Opportunity Zone Funds (QOZF's)

The Tax Cuts and Jobs Act in 2017 opened a loophole that allows a person to reinvest the appreciated value of almost any kind of personal property or business sale proceeds on a tax deferred basis. The loophole is what's known as Opportunity Zones. While there are thousands of them located across all 50 states and you could invest in a qualified opportunity zone property directly, we recommend using a seasoned and well-known property manager like Cantor Fitzgerald to invest in the property on your behalf. Cantor will invest your money into a portfolio of high-quality multimillion-dollar properties seeking optimal success. You'll begin to receive income in 2026 and if held for 10 years all of your money at that time including growth would come back to you tax free.

*Cantor Fitzgerald, White Oak Wealth Partners, and LPL Financial are separate entities.