What To Do Before, During, and After Selling Your Business

How to Turn the Sale of a Lifetime Into Tax-Free Income and Generational Wealth

Introduction: The Sale of a Lifetime

For most entrepreneurs, selling a business is the single largest financial event of their lives. You’ve poured decades of sweat equity, long nights, and endless risks into building something of value. Now comes the payoff — but also the danger.

Here’s the hard truth: most owners walk away from a business sale with 40–60% less than they should have.

Why?

• Taxes eat a massive portion of the proceeds.

• Poor deal structures reduce valuation.

• Owners fail to plan for what comes after the sale — how to replace business income, protect wealth, and build a legacy.

The result: business owners who worked their entire lives end up with less freedom, less income, and less security than they expected.

It doesn’t have to be that way.

With the right planning, you can:

• Keep more of the sale proceeds by eliminating or deferring taxes.

• Convert liquidity into lifetime income that doesn’t run out.

• Protect wealth for generations through advanced estate and Family IPO strategies.

This guide will walk you through what to do before, during, and after selling your business — and more importantly, how to make sure the sale doesn’t just create a one-time windfall, but a permanent financial engine for you and your family.

Part 1: Before the Sale — Positioning for Maximum Value and Minimum Taxes

Get Organized and Know Your Numbers

The first step in preparing your business for sale is to clean up your financials.

Buyers don’t just want to see revenue — they want confidence in the story your numbers tell. If your books are sloppy, incomplete, or inconsistent, it can kill deals before they even start.

Key areas to focus on:

• Financial statements: Make sure your income statement, balance sheet, and cash flow reports are accurate and up to date.

• Liabilities: Identify and, if possible, resolve outstanding debts or shareholder disputes.

• Customer concentration: If 70% of your revenue comes from one client, that’s a risk buyers will discount for.

• Forward projections: Show realistic, data-backed growth potential.

👉 Even if you don’t plan to sell for 3–5 years, start cleaning up now. Time gives you the chance to make adjustments that boost valuation — like reducing debt, diversifying revenue streams, or restructuring contracts.

Pro tip: Consider an independent audit. It adds credibility and gives buyers extra confidence.

Build Your Advisory Dream Team

Most business owners make the mistake of thinking they only need a broker or M&A attorney to sell. In reality, the most successful sales happen when owners surround themselves with a dream team of advisors:

• Business Advisors:

  • Business broker or investment banker

  • Valuation expert

  • Transaction/M&A attorney

  • Accountant

• Personal Advisors:

  • Tax strategist

  • Financial advisor (who understands post-sale planning)

  • Estate planning attorney

Why this matters: Selling your business isn’t just about closing a deal — it’s about what comes after. You only get one shot. If you don’t coordinate the business and personal side of the transaction, you could end up with a sale that looks good on paper but leaves you with a massive tax bill and no long-term income plan.

Think of it this way: you spent years building the business with a team. Don’t sell it without one.

Know Your True Business Value

When owners hear their business is worth $20 million, they often assume they’ll walk away with $20 million.

Wrong.

After transaction costs, broker fees, attorney fees, and — the biggest hit — taxes, you may only see 50–70% of the sticker price in your pocket.

That’s why it’s critical to:

• Get a valuation early. Work with an independent expert, not just a buyer’s offer.

• Understand different sale structures. Selling to a competitor vs. an ESOP vs. private equity will all yield different valuations and tax outcomes.

• Model the after-tax proceeds. What matters is not the “headline” sale number, but what you actually keep.

👉 Example:

• $20 million sale price

• Minus $1 million in fees

• Minus $8 million in taxes (capital gains, federal, state)

• Net proceeds: $11 million

Now imagine a Family IPO strategy layered in before the sale:

• Reduce taxes by $5 million through pre-sale planning.

• Redirect $6 million into tax-free income vehicles.

• Result: $16 million net wealth, plus guaranteed lifetime income strs that grow every year

That’s the difference planning makes.

Define Your Goals Beyond the Price Tag

Before you get too deep into deal structures, stop and ask:

• Do I want to sell 100% now and walk away?

• Would I consider staying on for 3–5 years under new ownership?

• Do I want to pass the business to family or employees?

• How important is it that the brand and culture continue?

• What are my income and lifestyle needs post-sale?

Your goals should drive the deal — not the other way around.

Example: If your business produces $1 million in annual cash flow today, and you’re used to living on $500,000, you’ll need to replace that income after the sale. Otherwise, the “retirement” you thought you secured may fall short.

Tax Elimination Strategies Before the Sale

This is where the real difference is made. Most owners lose 30–40% of their proceeds to taxes because they don’t plan.

Here are strategies to consider before the sale closes:

• Charitable trusts: Donate pre-sale shares to reduce capital gains.

• Section 1202 exclusion (QSBS): If your business qualifies, you may exclude up to $10 million in gains.

• Installment sales: Spread out tax liability over years instead of all at once.

• Family IPO strategy:

  • Move part of your ownership interest into a structure that transforms proceeds into tax-free wealth.

  • Use advanced insurance contracts and trusts to create tax-free retirement income for you and your heirs.

  • Protect against lawsuits and market downturns.

👉 Case Study:

• Owner sells a business for $10 million.

• Without planning: Pays $3 million in taxes, left with $7 million.

• With Family IPO pre-sale planning: Pays only $1million in taxes, redirects $4 million into a lifetime tax-free income plan generating $400,000+ annually, and leaves an additional $5 million protected for heirs growing to potentially $40 million tax free.

That’s not theory — that’s what advanced planning does.

Part 2: During the Sale — Navigating the Deal Without Losing Value

Once you’ve started the sale process, the clock is ticking. Deals often take 6–12 months to close, and a lot can go wrong during that time.

The Number 1 rule: Don’t lose focus on running the business.

Buyers will pay for stability and growth. If revenue dips, a key employee leaves, or projections fall short during negotiations, your valuation can take a hit — or worse, the deal can collapse entirely.

Here are the key priorities to keep in mind during this critical stage:

Keep Running the Business as Usual

It’s tempting to mentally “check out” once you’ve decided to sell. But until the deal is signed, buyers want to see that your business continues to perform.

That means:

• Hitting revenue and profit projections.

• Maintaining customer relationships.

• Keeping employees motivated (and ideally incentivized to stay after the sale).

If the business falters while you’re negotiating, expect buyers to renegotiate — or walk away.

Protect Confidentiality

Every buyer will want to see sensitive data about your company. But too much disclosure too early can backfire. Competitors posing as buyers could gain access to your financials, customer lists, or trade secrets.

The solution:

• Require every potential buyer to sign a non-disclosure agreement (NDA).

• Work with your M&A attorney to determine what information can be released at each stage.

Letters of Intent (LOIs) Aren’t Done Deals

A letter of intent (LOI) outlines the proposed terms of a sale. But it’s mostly non-binding.

Too many owners treat an LOI like a victory lap. In reality, the deal is still far from complete. The buyer will perform due diligence, explore risks, and often attempt to negotiate more favorable terms.

Don’t pop the champagne yet. Until the purchase agreement is signed, the deal can still fall apart.

Understand Deal Structure and Taxes

How your deal is structured can dramatically impact your after-tax proceeds.

• Asset sale vs. stock sale: Buyers usually prefer asset sales (they get tax advantages). Sellers often prefer stock sales (capital gains treatment). The wrong choice could cost millions.

• Installment sales: Spreading payments over years can reduce your immediate tax liability, but also introduces risk if the buyer defaults.

• Earnouts: Some deals tie part of the purchase price to future business performance. Great if you believe in the company’s growth — risky if the buyer cuts corners after acquiring.

This is where your tax advisor and Family IPO planning come in. By structuring the sale properly and aligning with pre-sale planning, you can:

• Eliminate or reduce capital gains taxes.

• Redirect proceeds into tax-free retirement structures.

• Ensure you don’t “retire into uncertainty.”

👉 Example: Two owners each sell for $8 million.

• Owner A: Asset sale, no planning. Pays $3 million in taxes. Walks away with $5 million.

• Owner B: Stock sale + Family IPO tax elimination strategy. Pays $1.2 million in taxes, walks away with $6.8 million, plus converts $4 million into a permanent, tax-free lifetime income system growing to potentially $26 million

One decision = millions in difference.

Avoid Pre-Spending or Mentally Retiring

One of the biggest mistakes owners make is assuming the deal is done before it’s actually closed.

Common pitfalls:

• Making big purchases in anticipation of liquidity.

• Paying off personal debts prematurely.

• Telling employees too early and spooking the team.

• Neglecting day-to-day business performance.

Remember: until the money hits your account, you haven’t sold. Stay disciplined.

Part 3: After the Sale — Turning Liquidity Into Lifetime Income

The ink is dry. The wire transfer clears. Congratulations — you’ve sold your business.

Now comes the next challenge: What to do with the money.

Many owners underestimate this stage. They assume they’ll simply invest in the market, live off the returns, and be set. In reality, without careful planning, the money can evaporate — through taxes, market volatility, healthcare costs, and poor spending decisions.

Here’s how to turn the sale into a permanent wealth machine:

Step 1: Eliminate Idle Cash Risk

The worst move after selling is to let millions sit in a bank account. Cash feels “safe,” but inflation erodes its value, and you miss out on compounding.

Instead, build a liquidity strategy:

• Immediate cash bucket: 1–2 years of living expenses in safe, liquid accounts.

• Mid-term bucket: Income-producing, lower-volatility assets.

• Long-term bucket: Tax-free strategies and generational wealth vehicles.

This ensures you have flexibility without losing purchasing power.

Step 2: Replace Business Income

When you sell, you don’t just lose an asset — you lose the income stream it generated.

If your company provided $750,000/year in cash flow, and you sell for $12 million, your Number 1 questions is:

“How do I turn this lump sum into income that lasts the rest of my life — without market risk?”

This is where the Family IPO strategy is transformative:

• A portion of proceeds is directed into advanced insurance and trust structures.

• These vehicles generate guaranteed, tax-free income for life.

• Unlike market-based withdrawals (where you risk running out of money), your income is permanent and predictable.

For many owners, the Family IPO produces 10x more lifetime income than simply investing in a brokerage account.

Step 3: Protect Against Taxes

Remember: even after the sale, taxes don’t stop. Capital gains, income taxes, estate taxes — they can quietly erode millions.

Strategies to protect wealth include:

• Roth conversions (where appropriate).

• Charitable remainder trusts to reduce taxable income.

• Family IPO layering to shield proceeds and convert to tax-free wealth.

• Estate planning updates to ensure your heirs aren’t hit with avoidable taxes.

👉 Example: A $15 million post-sale estate, unmanaged, could face $6 million in estate taxes. With strategic planning, you could eliminate 80–100% of that liability while also creating lifetime income for heirs.

Step 4: Healthcare, Medicare, and Long-Term Care

One of the most overlooked areas after a business sale is healthcare. If you’re under 65, you need a plan until Medicare eligibility. After 65, you’ll need a strategy to cover what Medicare doesn’t.

• Asset-based long-term care: Use a portion of proceeds to secure care that protects your wealth.

• Medicare gap planning: Avoid surprise healthcare expenses that can eat into retirement income.

By planning now, you ensure healthcare doesn’t become a financial burden later.

Step 5: Legacy and Generational Wealth

Selling your business doesn’t just create liquidity for you — it creates the opportunity to establish a multi-generational legacy.

Through the Family IPO, you can:

• Guarantee every member of your family an income stream — children, grandchildren, even future generations.

• Protect assets from lawsuits, divorces, and creditors.

• Ensure your life’s work isn’t wasted but multiplied.

This turns the one-time sale of a business into a 100-year wealth machine.

Conclusion: Don’t Sell Without a Plan

Selling a business is one of the most complex — and consequential — events of your life. Done wrong, it can leave you with less than half of what you deserve. Done right, it can secure your retirement, protect your family, and create generational wealth.

The difference comes down to planning.

• Before the sale: Clean up financials, build your team, reduce taxes in advance.

• During the sale: Structure the deal wisely, protect confidentiality, stay focused on operations.

• After the sale: Convert liquidity into tax-free lifetime income and legacy wealth.

At Platinum Endowment, we specialize in turning liquidity events into permanent financial engines. Our Family IPO strategy has helped business owners eliminate taxes, guarantee lifetime income, and create wealth that lasts for generations.

👉 If you’re considering selling your business — or already in the process — don’t go it alone.📞 Schedule your Private Endowment Consultation today to see how much more of your sale proceeds you can keep, grow, and protect. 630-834-3794