Selling Your Business? 4 Key Questions For Your Next Chapter

For many entrepreneurs and business owners, selling a business is one of the most important decisions of their financial lives. It represents decades of hard work, sacrifice, and dedication. But selling your business isn’t just about closing a deal; it’s about preparing for what comes next.

At SGL Financial, our experienced Buffalo Grove CFP® professionals specialize in guiding small business owners through this critical transition process from working to retirement. Whether nearing retirement or exploring a new business opportunity, we help you connect your wealth to your long-term financial goals.

To help you start thinking proactively, here are the top five questions business owners search for online when selling their business, and our insights on each one.

Read our latest guide: Smart Financial Planning for Buffalo Grove Business Owners

1. How do I know what my business is worth?

Valuation is often the first step in the selling process. Your business is more than just its annual revenue; it’s also about branding, profitability, contracts, assets, industry trends, and even how well the company runs without your daily involvement.

Buyers typically assess:

• Earnings before interest, taxes, depreciation, and amortization (EBITDA)
• Future growth potential
• Customer concentration and relationships
• Competition within your industry
  

Unfortunately, many business owners overestimate or underestimate their company’s value. That’s where Buffalo Grove business succession planning becomes critical. Working with experienced financial professionals ensures you receive an objective valuation and understand how that number fits into your wealth plan once you sell your business.

SGL Insights: At SGL Financial, we help business owners tie valuation into long-term financial planning so the sale proceeds support the lifestyle and goals you’ve worked so hard to pursue.

2. What are the tax implications of selling my business?

Taxes are one of the most significant factors in any business sale. Depending on how the transaction is structured—asset sale vs. stock sale—the tax outcome can look very different.

Your key considerations should include:

• Capital gains taxes on the sale proceeds
• Depreciation recapture, which can trigger higher ordinary income taxes
• State taxes depend on where your business is located
• Estate tax planning may be necessary if the sale has a meaningful impact on the value of your estate
  

The impact of a tax-efficient solution can mean thousands or millions of additional dollars for your retirement years. That’s why it’s important to integrate tax planning into your business succession strategy well before the sale.

SGL Insights: As part of our financial planning for small business owners, we help you develop proactive tax strategies, such as installment sales, charitable trusts, or reinvesting into tax-advantaged accounts. Our goal is to help you keep more of what you’ve built.

For an in-depth discussion on taxes and selling a business, tune into Our 2 Cents, a podcast where our advisors cover strategies for maximizing after-tax proceeds.

3. When is the right time to sell my business?

Timing your exit is part art and part science. From a financial perspective, you should sell when your company demonstrates strong earnings and stability, and when buyer demand for your type of business is high. From a personal perspective, the timing depends on your readiness to step back from daily operations and embrace the next chapter of your life.

Factors that can influence timing include:

• Industry growth or consolidation trends
• Current interest rates and lending conditions
• Your retirement readiness
• Health, family, or lifestyle considerations
  

SGL Insights: As Buffalo Grove financial advisors, we can help you evaluate market conditions and personal goals. The right time to sell is when the financials align with your life stage and long-term plan.

4. How should I financially prepare for life after selling my business?

Selling your business is not the end. Instead, it begins an exciting new chapter in your personal and financial life. For years, your company may have defined your daily routine, relationships, and goals. This makes selling or transferring ownership feel like a significant life change, and it is. 

Many owners experience what’s sometimes called the “post-sale void,” when the freedom they’ve gained feels strangely uncomfortable. One characteristic of this phenomenon is how many hours per day they sit in front of their big-screen TV at home.

Financial planning after business ownership should also consider your lifestyle, passions, and purpose. Some owners channel their energy into philanthropy, others into mentoring, and others into enjoying long-deferred travel or family time. 

Whatever your vision, aligning your financial resources with your anticipated lifestyle is key. 

That means:

• Structuring your wealth to generate a reliable income
• Establishing trusts or gifting strategies for the family
• Setting aside resources for charitable giving
• Reinvesting in new ventures or projects you are passionate about 

Even a significant payout from selling your business can erode quickly without careful planning, especially when you factor in taxes, inflation’s impact on purchasing power, and the risk of mismanagement. That’s why building a strategy that addresses multiple areas of your financial life is important:

• Retirement income planning is often the first step, determining how much you can comfortably spend each year without worrying about running out of money later in life. 
• From there, investment management becomes crucial, turning the lump sum from your sale into a diversified, income-producing portfolio that balances growth with preservation of principal. 
• Tax coordination also plays a major role, as the right strategies can help reduce one’s tax burden and keep more of one’s wealth working for one. 
• Finally, legacy planning ensures your wealth supports your family and charitable goals, allowing you to pass on assets and values that matter most to you.

SGL Insights: Listen to our recent podcast, “Health and Wealth in Retirement.” Our experienced financial professionals specialize in designing post-sale financial plans that give you clarity about your future security.

About SGL Financial:

We combine tax-focused planning, investment management, and succession strategies to help business owners protect their wealth and design the life they want after selling their businesses.

Ready to start planning your next chapter? 

Connect with a Chicagoland financial advisor at SGL Financial today.