Selling your business may be the most important financial transaction of your life. It is not just about signing a deal—it is about securing your family’s future, protecting your legacy, and maximizing the wealth you’ve worked decades to build.

At Magnolia Private Wealth, we can guide business owners through the complex process of preparing for a sale. The goal: turn years of hard work into lasting financial freedom.

Here are the 5 key areas to focus on before you sell:

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Position Your Business for Maximum Value

• Timeline Development – Make a timeline for your planned transition.
• Maximize Earnings (EBITDA) – Clean up financials 12–24 months in advance; trim unnecessary expenses to boost sales multiples.
• Build a Strong Management Team & Board – A business running without you commands a higher valuation. Also, professionalism and outside perspective on your business adds value.
• Right-Size Working Capital – Ensure required levels are in place but remove excess cash and assets not needing transferred to the buyer.
• Consider an ESOP – An Employee Stock Ownership Plan may provide liquidity, tax deferral, and a way to preserve culture and legacy.

Structure the Sale for Tax Efficiency

• Consulting Agreement Post-Sale – Negotiate future consulting income, which may be sheltered through retirement plan contributions.
• Expand Shareholders Pre-Sale – Gifting shares to children or trusts may spread gains across lower brackets.
• F Reorganization – Restructure into a holding company for added sale flexibility.
• Discounted Gifting – Use valuation discounts to transfer shares to family at a lower tax cost.
• Two-Year Straddle Sale – Close part of the deal in December and the rest in January to spread income across tax years.

Advanced Tax & Estate Planning

• Non-Grantor Trusts – Create independent taxpayers to reduce federal and state tax exposure.
• Incomplete Gift Non-Grantor Trust (ING) – In states like Nevada, may avoid state income taxes altogether.
• Grantor Retained Annuity Trusts (GRATS) - Transfer appreciated assets efficiently to your spouse or the next generation while using little or no lifetime estate tax exclusion.
• PTET Election – Elect the Pass-Through Entity Tax in the sale year to recapture state tax deductions above the SALT cap.
• Residency Planning – Consider re-domiciling to a low-tax state before selling.
• Personal Goodwill – With legal and valuation support, shift part of the sale from ordinary income to capital gain. What are your valuable skills you can provide to new buyers?
• Real Estate Carve-Out – If real estate is involved in the sale, a 1031 exchange can defer taxes and preserve wealth.
• Opportunity Zones - As part of your overall asset allocation, consider investing some of your realized gain from the sale into Qualified Opportunity Zones. This will defer the tax to a future date.
• Combine Strategies – The best outcomes often come from layering multiple approaches across your tax, estate, and financial planning structures.

Personal Financial Planning

• Financial Plan – Develop a plan to clearly identify priorities and annual financial needs post business sale. Make sure you are comfortable where you are in your financial life.
• Financial Framework – Develop your family’s financial structure to improve decision meaning and manage all aspects of your wealth.
• Asset Allocation – Determine how your assets will be invested post-sale to meet your priorities.
• Emotional Support – Prepare yourself emotionally for the sale. Selling will be unlike anything you’ve experienced in the past – highs, lows, gratitude, and regrets. Consider seeking out the help of an experienced counselor.

Magnolia’s Perspective

Exiting a business is more than a transaction – it is a once-in-a-lifetime wealth-building event. The right preparation can save millions in taxes, strengthen your legacy, and have peace of mind knowing you have made smart, deliberate choices.

At Magnolia Private Wealth, we partner with you to design and execute a customized exit strategy. From valuation planning to tax optimization to family legacy structures and managing your hard earned investment assets, we help you capture the full value of your life’s work.

Let’s start the conversation: If you’re thinking about selling your business in the next 1–5 years, now is the time to prepare.