Sooner or later, there comes a time when it’s best to sell your business to someone you can trust so you can take time to enjoy the hard-fought fruits of your labor and prepare for the next stage in life. Unfortunately, selling a business or passing one down comes with several complications rarely discussed in the open, leaving many business owners in the dark and caught out of much of what they’re owed. Carlos Lowenberg, however, is here to help.
Carlos Lowenberg, CEO and founder of business wealth firms Masterpiece Capital, LLC and Masterpiece Partners, LLC, has assisted with over 50 business exits worth upward of 9 figures. He has 25 years of focus on businesses, increasing their value and designing around 100 executive retention plans.
He also has expertise in philanthropy and business value/enhancement, making him and his firm excellent wells of knowledge and experience in selling/passing down a business. As such, he’s provided information concerning three problems that often arise unexpectedly when large business owners transfer their companies.
Value Identification and Building
The first problem Carlos notices many companies make is failing to properly evaluate or capitalize on their business’ potential value before transferring the company. This issue usually arises less out of negligence and more out of not leaving enough time in the plan to conduct the necessary operations to evaluate the business properly.
Although identifying and developing value will differ in methods at any given company, some general steps usually involve minimizing risk wherever possible, making a business attractive before transfer, and working on areas of the company that could build out the business’ overall value. Failing to follow these steps will not ruin a transfer but can make it less valuable and rewarding overall.
Tax Planning
Carlos notes that if you own a large business, you already know the complications taxes can bring, even during regular operations. Given how many moving parts there usually are in a business transfer, taxes pose an additional obstacle worth considering before moving forward.
Having substantial assets can prove annoying regarding tax considerations, so business owners should always consider the type of business they run — C Corp, S Corp, Partnership, etc. — and how that might affect their tax plans. Preparing for taxes is not about providing immediate solutions but patience and playing the long game. Remembering your goals as you plan is paramount to that long-term success.
Developing an Advisory Team
Finally, as Carlos points out, it’s essential to establish an advisory team dedicated to ensuring the transfer is as smooth and productive as possible. Again, given the many moving parts involved in the process, trying to handle everything either by yourself or with an incompetent team will likely do more harm than good, so it’s worth taking the time and resources to put a good team together to help you decide what’s best for your business at every step of the way.
Putting this team together is essentially a matter of reflection; the more you’re able to reflect on what the company means to you, what you want the company to mean after you leave, and what you want from the transfer, the more the team will be able to help you with. Part of that reflection goes back toward the advisory team, ensuring they remain accountable for their operations and that those operations align with your vision for the transition process.
At the end of the day, as the business owner, it’s in your hands how you want to handle the transition of power at your business. As Carlos and his firms note, however, it can be just as easy to lose value in a transition as it is to gain it, so make sure to find the right help wherever you can to ensure a painless process so you can get back to what matters to you most.
—
This post brought to you by Atif Sharif
Photos courtesty of Carlos Lowenberg
This post was originally published on here
