Business Owner Looking to Monetize


A business owner came to us after receiving an offer to purchase their business.

  • The Situation

  • Successful small business owner with around 50 employees
  • Accumulating a lot of cash in bank; no clear investment strategy
  • Not sure what financial resources are needed for the rest of his life
  • Unsure of whether it’s a good time to sell his business, or a good enough offer
  • Married, with two adult daughters
  • Would like to provide financial assistance to the next generation if resources allowed
  • Our Approach

  • Developed a long-term cash flow plan to project retirement income needs
  • Determined after-tax proceeds needed today for a successful financial plan
  • Compared the pros and cons of different payout methods
  • Analyzed retention of the business versus an immediate liquidity event
  • Determined that the present value of future cash flows was not substantially greater than the current offer
  • Analyzed the risk associated with timing of the sale relative to the current business cycle
  • Recommended to sell the business

  • Recommended a certified valuation analyst to provide an independent opinion
  • Introduced him to a business broker for due diligence on the offer
  • Worked with his business and personal tax advisor to accurately reflect a hypothetical sale in the financial plan
  • Recommended a corporate attorney to review operating documents and employment contracts to ensure a smooth transition
  • Worked with an estate planner to transfer a portion of the business to children in an irrevocable trust to remove future appreciation from the estate
  • Coordinated with an expert to design and purchase an appropriate amount of life insurance within an irrevocable trust to fund the projected estate tax liability

  • The business was sold for a significant price
  • Client gifted shares to their kids at a material discount to fair market value
  • After monetizing the business, Heritage implemented a robust investment plan
  • Sound estate plan in place adhering to clients’ wishes