Creating an exit strategy for your business

You’ve worked really hard for years to build up your business and when the time comes to sell it, you want to get the best result you possibly can and minimise the tax you’ll pay in the process. Sound like a good plan?

Well, if you don’t have the right strategy in place, you may end up paying a lot more tax than you need to. So here’s our advice on how to plan an ideal exit strategy for your business.

The most important thing when it comes to selling your business, is to have a game plan! Please make sure you don’t surprise your accountant or financial advisor by telling them you’ve sold your business and then asking them what to do from there!

We worked with a client recently where we planned his exit strategy 2 years in advance. Initially, we focussed on helping him get the best sale price possible, but more importantly when the cash from the sale came through - we knew exactly where that money was going and what tax exemptions we could access for the best result.

My background is as a tax agent and Chartered Accountant, but I also have a Masters in financial planning. What those skills allow us to do is make sure cash is flowing to the right places from both the tax point of view, but also from an accounting and financial planning standpoint. Looking at your exit strategy from all angles is key to a good outcome.

In this case study, the client ended up selling the business for $600,000 and paid no tax on the sale. Through strategies like accessing retirement exemptions, claiming some tax back and making some contributions, not only did they not pay tax but they received about $40,000 in tax refunds, which they were certainly very happy about!

If you’d like to have a chat about an exit strategy for your business, we’re here anytime to offer our advice, so get in touch today.