For many business owners, it’s difficult to imagine life without their business. While it’s easy to put off planning, preparing for an exit makes your business more stable and valuable—whether you plan to sell soon or years down the road. A business that can be sold for top dollar is also one worth keeping.

Key Features of a Valuable Business — To maximize value, your business should:

• Function independently of the owner
• Have engaged, incentivized key employees
• Mitigate continuity risks
• Maintain a diverse customer and vendor base
• Protect intellectual property and trade secrets

Would you be unhappy if your business had these features today? Likely not—this is the essence of exit planning. Whether selling to a third party, passing it down, or keeping it long-term, making your business more valuable should always be a priority.

Business Valuation: A professional valuation considers tangible assets, intellectual property, cash flow, and market comparisons. This assessment not only helps identify areas for improvement but also ensures you have a realistic number when structuring compensation plans or planning for retirement. An exit planning advisor can provide strategies to enhance your business’s transferable value.

Risk Management and Continuity Planning: Every business needs a risk mitigation strategy and continuity plan. Implementing protections like buy/sell agreements, key employee policies, proper insurance, and written continuity instructions is essential. A valuable business proactively develops a succession plan for key personnel. Succession planning boosts employee retention by demonstrating clear career paths and internal growth opportunities. It reduces reliance on external hiring while fostering engagement and long-term commitment. Succession planning preserves stability and ensures growth in the company beyond its founder.

Turning Key Employees into Growth Partners: A strong succession plan identifies key employees but retaining them requires thoughtful compensation structures. Beyond competitive salaries and benefits, high-value businesses often include:

• Profit-sharing plans
• Cash and non-cash bonuses
• Phantom stock plans
• Non-Qualified Deferred Compensation (NQDC) plans

These incentives tie compensation directly to business growth, turning key employees into long-term partners. A business positioned this way is more attractive to buyers and well-prepared for an internal transition.

Tax Implications of Selling a Business: Tax strategy is critical in business sales. The right approach can significantly reduce liabilities and maximize net proceeds. Some key strategies could include:

• Employee Stock Ownership Plan (ESOP)
• Qualified Small Business Stock (QSBS)
• Charitable Remainder Trusts (CRTs)
• Opportunity Zones
• Asset vs. Stock Sale

Planning for Post-Sale Life: What happens after the sale? Whether you transition into an advisory role, start a new venture, or retire, having a clear plan is crucial. Financial planning post-sale ensures a smooth transition and helps secure your future.

Work with Asset Strategy Advisors: Asset Strategy’s advisors, legal experts, financial professionals, and business brokers can guide you through the process, helping you optimize value and navigate the intricacies of a successful transaction. Want to learn more? Connect with us at WealthManagement@NBTC.com.

DISCLAIMER:

Because investor situations and objectives vary this information is not intended to indicate suitability or a recommendation for any individual investor. This is for informational purposes only, does not constitute individual investment advice, and should not be relied upon as tax or legal advice. Please consult the appropriate professional regarding your individual circumstance. Product guarantees are based on the claims-paying ability of the issuing company and assume compliance with the product’s benefit rules, as applicable. There are retirement account risks that could diminish investor returns, such as, but not limited to: low interest rates, market volatility, withdrawal timing and sequence of returns risk, government policy uncertainty and increased longevity. Prospective investors should perform their own due diligence carefully and review the “Risk Factors” section of any prospectus, private placement memorandum or offering circular before considering any investment. Advisory services offered through Asset Strategy Advisors, LLC (ASA), an SEC registered investment adviser. Insurance services offered through Asset Strategy Financial Group, Inc. (ASFG). CIS, ASA and ASFG are separate companies.

Products and services made available through Asset Strategy and Concorde Investment are not insured by the FDIC or any other agency in the United States and are not deposits or obligations of, nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.