The planning window before a business sale
Almost everything useful about sale planning has to happen while the sale is still hypothetical.
Owners usually contact a planner after a buyer has appeared. That is understandable and it is also the point at which the menu of options has already shortened considerably.
Several approaches that change the timing or character of a gain generally require that structure be in place before the seller is contractually committed. Once a binding agreement exists, or once a sale is treated as effectively arranged, introducing structure can be ineffective or worse.
What is easier before a letter of intent
- Modeling after tax proceeds under alternative deal structures.
- Evaluating whether the asset qualifies for exchange or installment treatment.
- Establishing trust structures where they are genuinely appropriate.
- Adjusting entity structure or ownership where advisable and defensible.
- Reducing owner dependence in the business to support both value and buyer confidence.
- Deciding whether the price actually supports the owner's post sale life.
The practical implication
If a sale is plausible within the next several years, the planning conversation belongs now rather than later. There is no cost to knowing your position early and considerable cost to discovering it late.
Key takeaways
- The letter of intent is a planning deadline, not a starting point.
- After tax proceeds are the number that matters.
- Early modeling by your CPA is the highest value first step.
Important disclosure
This content is general education, not legal, tax or investment advice, and not a recommendation of any specific product. Suitability depends on individual facts, product terms, issuing company strength and current law. Consult your own licensed legal and tax professionals before acting.
Last reviewed 2026-08-09 by Tim Parnell.
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