How much do I need to sell my business for?
Brian and Amy’s business is their major asset. Their primary residence and vacation home represent a large real estate investment and they have minimal liquid assets. When we met, they were unsure how to maintain their current lifestyle after they sold their business. They had a few questions and concerns:
- How much will they need to net from a business sale to maintain their lifestyle?
- They are charitably inclined and want to make sure that is a priority.
- They would like to transfer wealth to their children in a tax efficient manner.
- They have significant income that is not needed to maintain their lifestyle.
- They have significant mortgages on their real estate.
Brian & Amy were referred to Steward Advisors through an M&A advisor. At an initial meeting we discussed their current lifestyle, family, and future goals for retirement and completed the Steward Lifestyle & Family Needs Analysis with the couple.
After we met, we created a comprehensive financial plan using this approach:
- Developed a long-range cash flow projection.
- We analyzed various business sale prices to determine sale price necessary to support lifestyle.
- Reviewed opportunities to use donor advised fund or charitable trust to efficiently gift a portion of business to charity.
- Reviewed adequacy of life insurance to provide liquidity in the event of death before business sale.
- Identified opportunity to use qualified retirement plan to shelter current income.
- Recommended mortgage debt paydown prior to building up an investment portfolio.
Brian & Amy sold their business, were happy with the results and have retained Steward to manage the proceeds.
- Monte Carlo analysis shows high retirement success rate based on conservative investment portfolio.
- Wealth transfer accomplished with minimal estate or gift tax.
- Proceeds of portion of sale contributed to DAF for future charitable contributions.
- Mortgage debt paid by time of business sale.
Are you in a similar situation? We'd be happy to talk. Contact us for the full case study or to discuss your unique situation.