What Baby Boomers Must Know About Selling Their Business

Attorney Susan Wells
Attorney Susan Wells

We provide asset protection planning for many types of people. One of my favorite types of client is the successful business owner who is ready to sell and enjoy the fruits of their hard earned labor. Contrary to popular advice, your liability does not end at the sale and one of the things I’m always worried about is protecting sellers and their newfound liquidity from is the buyers themselves. Today my friend attorney Susan Wells and her associate Jon Ketcham share some vital issues for Boomer aged sellers to consider.  – Ike Devji

What Baby Boomers Must Know About Selling Their Business

You may be at the point where you are starting to think more about when and how you might leave your company than about growing it to the next level. “What,” you may ask, “could be the next chapter in my life?” The media is full of stories of people who have decided that one career is not enough. New interests and new challenges await, regardless of the age you start. As a successful business owner, you have a great advantage in being able to decide when the time is right for you to leave. If that time could be in the next few years, the time to start planning is now. If that plan might involve a sale to a third party, read on.


The first part of any plan is clearly identifying your goals.

Ultimately, these goals are personal – unique to you. When it comes to selling a company, however, certain goals appear to be common for all owners.

  • Maximizing the price you receive (and, getting that price paid to you on favorable terms)
  • Taking care of the employees who helped you make your company a success
  • Ensuring the continued success of the company you built

Although these goals might sound similar to your own, don’t stop with these – spend time to identify all of the goals you have. Start by thinking about the situation you would like to be in on the day after your exit. Do you have enough money to support your needs? Do you want any continuing involvement in or ties to your company? Do you have the freedom you need to pursue the other opportunities you have in mind? The better you are able to describe your goals, the better you will be able to create a transaction that achieves them.

Business Planning

Your ability to achieve your goals in a sale ultimately depends on your creating a company that investors want to buy. The second part of your plan should detail the changes you need to make to make your company as attractive as possible to investors.

What do investors look for?

Investors get excited about companies that have the potential to grow under their ownership. The best and most obvious way an investor can see this in a company is determined by whether the company has a track record of success and growth.

As such, your first area of focus is continuing to build your company’s revenue and earnings. Nothing will reward you more at the time you sell. Slowing down and letting your company drift for a year or two before selling will likely yield you a significantly lower price and a longer time on the market than if you sold while your business was on an upswing.

While there is no substitute for having a demonstrated track record of success, keep in mind that the investor on the other side of the table also needs to be convinced that the company will be equally successful for him. In other words, you have to show him that the company will continue to be successful after you leave.

Taking some simple financial and operational steps to demonstrate the quality and durability of your company may enhance your credibility, facilitate a sale and increase its value. Some steps to consider include:

  • Practice good financial stewardship. Complete, accurate and clear financial books and records will build an investor’s confidence about every facet of your company.
  • Refine and thoroughly document your business methods and systems. This provides direct evidence that you have set up your company to be run for the long haul. If you are the only one who knows how to run your business or has the relationship with your customers and vendors, it will be difficult to transition your business to an investor.
  • Negotiate and document the terms of your arrangements with key vendors and suppliers. If special or exclusive arrangements help your company earn what it does, you must be able to transfer those.
  • Protect all of your key assets – including the ones you can’t see. Trademarks, domain names, proprietary software and other intellectual property are frequently where much, if not most, of your company’s value resides. Protect them. Make sure you own them and, where appropriate, register them.


No one likes to pay more taxes than absolutely necessary. Business owners are certainly no exception. As a result, many owners intentionally decrease their profits in order to show less taxable income. Unfortunately, when going to sell your company, this can be counter-productive. Investors value your company based on its profits.  Lower profits = lower price.

If your tax strategy hides your profits, don’t expect your investor to search for that extra income. On the contrary, the burden is on you to prove that an expense you want to claim as income is not really an expense needed to support your company’s business. Keep in mind that this is one area where investors are not inclined to give you the benefit of the doubt.

Maintaining credibility is critical to a successful negotiation and sale. If you stretch too far here, an investor may start doubting other claims you made.

This is not to say that you should abandon this tax strategy completely. Talk with an experienced M&A intermediary for guidance on what investors are likely to accept and what they will not.

If you have begun thinking about opening another chapter of your life – one that includes a possible sale of your company in the next few years, now is a good time to talk with your advisors and start planning. For most business owners, enhancing the value of their company and closing a transaction that achieves their goals will require a 1-2 year head start. Get started now. You may even find that running your company like it will soon be for sale may be so rewarding that you decide to put the sale off.

The best is yet to come!


Susan E. Wells is a partner with the Phoenix law firm of Wells & Gerstman PLLC. Her corporate and business practice encompasses all aspects of business transactions and commercial relationships in numerous industries, including franchising and buying and selling businesses. Wells & Gerstman PLLC• 480.368.9393

Jon Ketcham
Jon Ketcham



Jon Ketcham is the principal of Ketcham & Company, a merger and acquisition advisory firm. His expertise includes exit planning for business owners and representing buyers or sellers in M&A transactions.

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