For many business owners, selling a company is more than a transaction. It is a once-in-a-lifetime event that could define their financial future. Yet too often, owners enter this critical phase unprepared, leaving value on the table or exposing themselves to unnecessary risk. Here are some of the most common mistakes we have seen and how to avoid them.
Waiting Too Long to Plan
One of the biggest missteps is delaying the planning process. Preparing for a business exit is not something that can be done in a few months. Ideally, owners should begin planning years in advance. This allows time to clean up financials, optimize tax strategies, and align personal and financial goals with the transaction.
Neglecting Personal Financial Readiness
A sale might generate significant proceeds, but will it be enough to support your lifestyle, legacy, and retirement goals? Too often, owners focus solely on business valuation and forget to model their personal financial plan. Knowing the amount you truly need to reach your long-term objectives can help determine the right timing and structure for your exit.
Overestimating Business Value
Some owners assume their business is worth more than it is. Without an objective valuation, unrealistic expectations can derail negotiations or lead to disappointment. A professional assessment, along with recast financials that strip out personal expenses, can provide a clearer picture of true market value.
Overlooking Tax Implications
If not planned for in advance, taxes can erode a significant portion of sale proceeds. From capital gains to state taxes to estate planning strategies, proactive coordination with advisors may dramatically change outcomes.
Failing to Build the Right Team
Exiting your business is a complex process that involves many moving parts, especially while still focused on running day-to-day operations. By surrounding yourself with a trusted team consisting of a wealth advisor, M&A attorney, estate planning attorney, and investment banker, you can ensure every detail is handled professionally and your interests are protected throughout the transition.
At Gryphon Financial Partners, we help business owners navigate this transition with clarity and confidence. By avoiding common pitfalls and taking a proactive approach, you can turn your life’s work into lasting wealth and a legacy.
Disclosure
This material is provided by Gryphon Financial Partners, LLC (“Gryphon”) for informational purposes only. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Facts presented have been obtained from sources believed to be reliable. Gryphon, however, cannot guarantee the accuracy or completeness of such information. Gryphon does not provide tax, accounting or legal advice, and nothing contained in these materials should be taken as tax, accounting or legal advice. Individuals should seek such advice based on their own particular circumstances from a qualified tax, accounting or legal advisor.