Jared Freese, CFP®, CLU®, ChFC®, CEPA
Certified Exit Planner & Wealth Advisor
INTRODUCTION
Meet John Carter, a seasoned business owner contemplating the sale of his successful tech startup. For over two decades, John has nurtured his business from a fledgling company into a major player in the tech industry. Recently, he's been contemplating selling his company. While the thought of cashing in on his years of hard work is appealing, it's mingled with a cocktail of uncertainty, nostalgia, and fear of the unknown. Selling his business isn't just a financial decision—it's a personal one, tied deeply to his identity and future lifestyle.
THE EMOTIONAL JOURNEY
The thought of letting go of his life's work can be unsettling. John wonders if he is ready to part with his business and whether the sale will support his desired lifestyle. The mix of emotions is overwhelming, making it clear that selling his business is a life-altering decision that extends beyond financial gain.
KEY QUESTIONS TO ASSESS READINESS TO SELL YOUR BUSINESS
1. Why am I selling my business? Understanding the underlying reasons for selling-whether for retirement, pursuing other interests, or financial necessity-helps clarify goals and expectations.
2. Is now the right time to sell? Assessing market conditions, industry trends, and the current state of the business can determine whether it's a favorable time to sell.
3. What is my business truly worth? A professional valuation is essential to set a realistic price and understand the factors that contribute to the business's value.
4. What are the tax implications of selling my business? Consulting with tax professionals can help minimize tax liabilities and maximize net proceeds from the sale.
5. How will the sale affect my personal financial situation? Understanding how the proceeds from the sale will impact personal finances, retirement plans, and lifestyle is critical.
6. Who should be on my advisory team? Having the right team, including a business broker, investment banker, accountant, financial advisor, and attorney, can guide the process and ensure that all aspects are handled professionally.
7. What information will buyers want to see? Preparing thorough and transparent documentation about the business's financial health, operations, and market position is crucial for due diligence.
8. How will I find the right buyer? Identifying whether the buyer should be an individual, a competitor, a strategic buyer, or a financial buyer influences the marketing approach and the negotiation strategy.
9. What are my plans after selling the business? Considering life post-sale, including potential new ventures, hobbies, or retirement activities, is important for a smooth transition.
10. How will the sale impact my employees and customers? Planning for the transition to maintain continuity for employees and service for customers can affect the legacy of the business and its continued success under new ownership.
HOW GATEWOOD WEALTH SOLUTIONS CAN HELP
At Gatewood Wealth Solutions, we understand the complexities involved in selling a business. Our team of Certified Exit Planners, Attorneys, Certified Financial Planner Professionals, and Chartered Financial Analysists are equipped to guide business owners like John through every step of the selling process.
SERVICES PROVIDED BY GWS
Our team of professionals provide:
· Pre-Sale Financial Planning: Aligning business and personal finances with post-sale goals.
· Business Valuation: Professional analysis to determine and justify your business’s market value.
· Tax Planning: Strategies to minimize taxes before, during, and after the sale.
· Letter of Intent Analysis: Professional review and analysis of LOI proposed deal structures.
· Investment Education: Demystifying the stock market and creating tailored investment strategies.
· Investment Management: Designing investment portfolios focused on preservation of purchasing power and income distribution.
· Emotional and Lifestyle Transitioning: Support in transitioning to life after business, maintaining an identity, and striving to achieve new goals.
OVERCOMING RELUCTANCE TO INVEST CASH POST-SALE
John Carter, like many business owners, harbors a deep-seated reluctance to invest in the stock market—a realm he perceives as volatile and beyond his control. His comfort zone has always been his business, where he could influence outcomes and directly see the impact of his decisions. This transition from a controlled, familiar environment to the unpredictable nature of the stock market is daunting.
EMPOWERING INVESTING THROUGH EDUCATION
At Gatewood Wealth Solutions, we understand the trepidation business owners feel about entering the stock market. We tackle this by educating John about investment fundamentals, crafting personalized strategies, and managing investments to generate stable income, ensuring his family's lifestyle is maintained. Our approach is rooted in education and transparency. We provide:
· Educational Workshops and Resources: We demystify the stock market by explaining its mechanisms, the role of diversification, and the importance of asset allocation. This knowledge empowers our clients to make informed decisions.
· Tailored Investment Strategies: Recognizing that each client's risk tolerance and financial goals are unique, we craft personalized investment strategies. These strategies are designed not just to preserve wealth but to generate income that supports your family's lifestyle.
MANAGING INVESTMENTS FOR SUSTAINED INCOME
Post-sale, the income that once flowed from the business needs to be replaced to maintain the lifestyle John and his family are accustomed to. Our team Chartered Financial Analysts (CFA®’s) and Investment Committee at Gatewood Wealth Solutions manage investments utilizing our cash management and distribution strategy with a keen focus on generating reliable income distributions while remaining confidently invested in the market.
COMPREHENSIVE FINANCIAL PLANNING WITH FORECASTS & BENCHMARKS
To further instill confidence in the investment process, we develop a comprehensive financial plan for each client. This plan includes:
· Financial Forecasts: We project future growth and income based on current assets and investment strategies, allowing clients to see potential financial scenarios.
· Benchmarks: Regular benchmarks are set to monitor progress and make necessary adjustments. This helps our clients remain on track to meet their financial goals and can adapt to changes in the market or personal circumstances.
Our detailed financial plan with forecasts and benchmarks provides John with a clear vision of his family’s financial future, including potential growth and income from investments.
SCORING SYSTEM & CALL TO ACTION
To help you gauge your preparedness for selling your business, Gatewood Wealth Solutions offers a comprehensive readiness assessment. This assessment scores your readiness across several critical areas, helping you identify gaps and plan effectively.
WHY CHOOSE US?
Gatewood Wealth Solutions isn't just a financial advisor; we're a team of experienced credentialed professionals who care about you and your family. We want to be your partner in this pivotal transition. With our holistic approach, we work so no stone is left unturned in preparing you for a successful sale and a fulfilling transition into your next life’s chapter.
ARE YOU READY TO TAKE THE NEXT STEP?
Contact Gatewood Wealth Solutions today. Let us help you navigate the complexities of selling your business, ensuring you work towards accomplishing your financial goals and transition smoothly into the next phase of your life.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Business value estimates are not an official appraisal of a businessʼs value and may not be provided to a third party or used for lending or third party sales. A Business Value Estimate is intended to be used as part of the business planning or personal financial planning process. Business Value Estimates are provided by a third party such that LPL makes no representations regarding the accuracy of the illustrations. LPL does not independently verify the accuracy of the information you provide or of the illustrations presented (149-LPL).
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