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Getting Rich: How Business Owners Can Maximize Their Personal Wealth When They Sell Their Business
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Transcript of Getting Rich: How Business Owners Can Maximize Their Personal Wealth When They Sell Their Business
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Getting Rich How Business Owners Can Maximize Their
Personal Wealth When They Sell Their BusinessSeptember 17th | 2:00-3:30 p.m. EDT
Carlos FerreiraTransaction Advisory Services Practice Leader - Metro New York Cluster
Grant Thornton LLP
Russ Alan PrincePresident
R.A. Prince and Associates, Inc.
Andy TarquinioTax Partner and Melville Office Tax Leader
Grant Thornton LLP
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Three Actions that Enable Business Owners to Maximize Personal Wealth on the Sale of Their Businesses
Pre-sale planning• Corporate (Business) Preparation• Business and Family Wealth Tax Planning
During the sales process• Skilled Negotiations
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Actions that produce greater family wealth
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Research StudyEvaluate the extent to which business owners are engaging in best practices when they sell their companies
271 business owners were surveyed
Criteria:• All were privately owned companies• All were senior executives • All had a financial stake in the sale of the company• All would likely sell their companies some time in
the future
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Segments
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Age of the senior executive
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Timing of sale
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Business types
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Average annual sales
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Goals When Selling the Business
• Getting the best price• Desire to become wealthier• Making sure loved ones are financially cared for• Legally minimizing taxes owed on the sale
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Getting the best price
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Desire to become wealthier
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Financial care of loved ones
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Legally minimizing tax owed on the sale
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Best PracticesPreparing the Business for Sale
Opportunities to increase the selling price of the business• Up-to-date valuation• Succession plan• Incentive compensation plan• Financial statements that effectively communicate
the value of the company
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Presale corporate actions
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Best PracticesMaximizing value through tax planning
Opportunities to increase the net after-tax proceeds on the sale of the business• Obtain an understanding of the relative importance that tax structure
plays in conveying and maximizing value during the sales process• Organizing the company's legal affairs in order to support an asset sale• Pre-sale restructuring to separate unwanted assets not used in the
business or retained for other purposes• Pre-sale estate and gift tax planning • Implementation of incentive compensation plans to reward and retain
key employees• Maximizing the value of tax attributes and transaction related expenses
incurred in connection with the sale
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Best PracticesMaximizing value through tax planning
Opportunities to increase the monies to the family from the sale of the business• Using partnerships and trusts to lower estate taxes• Using charitable trusts to lower the taxes owed on
the sale of the business
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Using partnerships or trusts to lower estate taxes on the sale of the business
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Using charitable trusts or corporate structures to lower taxes on the sale of the business
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Best PracticesNegotiating
Opportunities to get a preferential deal when selling the business • Negotiating to win!• Understand the motivations and limitations of the
people on the other side of the table
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A win-win negotiation strategy is the best approach to selling a business
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It's critical to develop a deep understanding of the people on the other side of the table when selling a company
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Where Business Owners Turn to For Advice
Critical to being able to provide business owners your services is reaching them
Referrals tend to be exceedingly important• Centers of influence• Other business owners
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Sources of advice
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Key Implications
• Business owners generally want to maximize the personal wealth from the sale of their companies
• There are 3 ways they (their families) better accomplish this:– Corporate preparation– Business and Family Wealth Tax Planning– Effective negotiations
• While some business owners are taking appropriate actions, many are not.– Significant opportunities for these business owners to
take action and increase their family’s wealth from the sale of the company
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Presenters
Carlos FerreiraTransaction Advisory Services Practice Leader - Metro New York ClusterGrant Thornton LLPT 212-542 9825M 973 641 6171Email: [email protected]
Russ Alan PrincePresidentR.A. Prince and Associates, Inc.T 203-938-5557Email: [email protected]
Andy TarquinioTax Partner and Melville Office Tax Leader Grant Thornton LLPT 212-542-9720M 631-836-1364Email: [email protected]
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Report to CIMA®/CIMC®/CPWA:If you hold the CIMA®, CIMC® or CPWA® certification, you may report this pre-accepted CE
program online by logging into your My IMCA account at www.imca.org/user. Detailed reporting instructions can be found at http://www.imca.org/pages/onlinereporting.
CE Sponsor Name: Financial Advisor MagazineCustomer ID: 113555 Course Title: Getting Rich: How Business Owners Can Maximize Their
Personal Wealth When They Sell Their BusinessCourse ID: 13FAM014
This is a live event only. No recording of this presentation will be available
For upcoming webinars, please visit http://www.fa-mag.com/webcasts.htmlPlease send your questions, comments and feedback to: [email protected].
CE CreditsCIMA® CE Credit
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