Business Exit Planning · Tucson, Arizona
Business transition planning for owners whose wealth is inside the company
Value and outcome
Will The Sale Actually Fund Your Retirement?
Five years out you can still change the financials a buyer will see, hire the manager who replaces you, and restructure the entity before the tax position is locked. Eighteen months out, the financials a buyer will see are already written.
The value gap
A buyer prices your company off three years of clean financials and a management team that can run it without you. Both take years to build and years to prove, which is why the gap gets closed with operating changes rather than with negotiation.
The wealth gap
Whether the proceeds fund the life that follows. Closing it means structuring the deal for the tax bill, turning a lump sum into income you can draw on, and moving profit into assets outside the company while you still own it. That second half is retirement income planning, and it starts before the deal closes. Most owners have never run this number.
The two move together. A deal structured only for price can widen the second gap while it closes the first.
The decision underneath the timeline
Who takes over, and what each route requires
Every item on the runway assumes an answer to this question. There are three realistic buyers for a privately held company, and each one asks something different of you before it will work.
The choice is rarely obvious, and it is worth making deliberately rather than defaulting to whichever offer arrives first. It also changes the tax structure, so it belongs in the conversation with your CPA early rather than at the closing table.
The runway
What Happens In The Years Before You
Sell A Business?
Most exit advice starts twelve to eighteen months out, when the transaction is already in view. By then the levers that decide what you keep have mostly been pulled. Start three to five years out and those levers are all still yours to pull.
Get an independent business valuation
An independent valuation tells you what the business is worth today. A personal plan tells you what it needs to be worth. Most owners have never seen both at once, and the distance between them is the whole reason to start early.
Structure the business to run without you
Buyers pay less for a company that depends on its owner. Building a management team that can run the operation takes years to do and years to prove, which is why it cannot be arranged once an offer arrives.
Lock in the people and the structure
Key employees are part of what a buyer is paying for, and retention agreements only count when they were signed well before the sale. Business succession also turns on entity structure, and both need runway before a buyer will credit them.
Fund what the documents promise
The buy-sell agreement gets reviewed against a current valuation, the insurance funding it gets resized, and the estate plan gets checked against what the sale will actually produce.
Owners come to us at every point on this runway. Our guide to exit planning for business owners covers what each phase involves.
Running alongside the timeline
Two things that have to happen before the exit year
The runway covers what the business needs. These two run in parallel and are about the people who make it valuable and the money that has to exist outside it.
Workstream one
Keeping the people a buyer is paying for
Your business value is not only in the equipment and the contracts. Losing a key executive during a transition can move the valuation, and a buyer knows it. Retention agreements only count when they were signed well before the sale, which is why this cannot wait for an offer.
There is no single right structure. The common ones are:
- A Section 162 bonus plan. The company pays premiums on a life insurance policy the executive owns. The executive gets the benefit, the company takes a deduction.
- Non-qualified deferred compensation. Lets an executive defer income past the limits of a standard retirement plan, tying them to a future date rather than a promise.
- Phantom stock or stock appreciation rights. Gives the team a stake in the increase in company value without diluting your equity.
Which one fits depends on your balance sheet and your culture, and each carries its own tax treatment to work through with your CPA.
Workstream two
Building wealth that is not the company
If the business is ninety percent of your net worth, you are concentrated in one industry and one local economy, and the exit has to go perfectly. The goal is for the business to be an option for your retirement rather than a requirement.
Moving money from the company to your personal balance sheet takes precision to avoid double taxation. The usual routes are:
- Defined benefit and cash balance plans. For high-income owners, these allow far larger annual deferrals than a standard retirement plan, reducing the current corporate tax bill while building assets outside the business.
- Distribution timing. Coordinating distributions from an S corporation or LLC with your personal bracket rather than taking them on autopilot.
- Company-owned life insurance. Builds a reserve the business can draw on, and can later provide the owner a source of retirement income.
Done consistently over several years, this is what turns a good sale price into a funded retirement rather than a large deposit with no plan attached.
The part nobody schedules
What happens the Monday after
Owners plan the transaction in detail and the life that follows it hardly at all. It is the most common regret we hear, and it is the one part of the process a lawyer and an accountant will not raise with you.
Going from sixty hours to none
For most owners the company has been the structure of the week, the source of identity, and the answer to what do you do. Selling it removes all three at once, on a date you chose.
The owners who handle this well tend to have decided in advance what the next chapter is actually for. Not a vague plan to travel, but something specific enough to get up for: a board seat, a business they back rather than run, time with grandchildren that is scheduled rather than hoped for, or work through a foundation.
This is not a financial question, but it becomes one quickly. An owner with nothing to move toward frequently either sells at the wrong moment out of restlessness, or delays past the point where the successor is still waiting. Both are expensive.
Why we raise it at all
Because it changes the numbers. How much income you need, how much liquidity you want available, and what you want the proceeds to actually do are all answers that depend on what you plan to do next.
We are not going to tell you what your second act should be. We will ask about it early, because the plan built around a clear answer is a different plan from the one built around a blank space.
Timing
When Business Transition Planning Should Start
Three to five years before you intend to leave is the common answer. The more useful one is that the work makes the business stronger whether or not you ever sell, so there is little reason to wait.
Signs it is time to start planning
You have stopped reinvesting because you are thinking about leaving.
Most of your net worth sits inside one illiquid company.
The buy-sell has not been looked at since it was signed.
A successor is ready now and is not going to wait indefinitely.
Your health, or your spouse's, has entered the conversation.
If your situation is genuinely simple, we will say so. That is a short conversation, and a free one.
How coordination changes the math
When the building is worth more than the buyer can borrow
The hardest part of many exits isn’t finding a successor. A capable successor can still be unable to finance a company and its real estate in a single purchase. The illustration below works through one way to structure around that.
Illustration · When the company and the building are one asset
Separating the business from the building so the next generation could afford it
Consider an owner whose company is worth roughly $3 million, operating from a building the family also owns worth another $2 million. Sold together, the successor has to finance $5 million, and a lender sizing the loan against what the company earns will not get there. Separating the two changes what is possible. The operating company transfers at $3 million on a valuation tied to its cash flow, which is the number a lender will underwrite. The family retains the $2 million building and leases it back to the business, drawing income from an asset they already own. Coordinated with the family's attorney and CPA, one transaction that could not be financed becomes two that can.
The business and the building were one decision. Splitting them was what made the exit possible. Our guide to Separating Real Estate From Your Business covers how Tucson owners structure it.
Illustrative scenario shown for educational purposes. It does not describe a specific client engagement.
Since 2009
Coordinating business transitions across Southern Arizona
Two paths
A transfer often works better as two transactions than one
Alongside your team
We coordinate with your attorney and CPA, not around them
Business exit questions
Business Exit Questions
Tucson Owners Ask
Do I have to leave my current advisors to work with GIS?
No. GIS is built to work with the professionals you already have. Your attorney keeps drafting, your CPA keeps filing, and your broker still runs the sale when the time comes. The coordination work sits between them, which is the part that usually has nobody assigned to it.
What is the difference between GIS and a business broker or M&A advisor?
A broker or M&A advisor sells the business, and their work starts near the finish line. GIS works the years before that: aligning the valuation, the buy-sell, key employee retention, tax structure, and your personal estate so the transaction produces what you actually need afterward. We coordinate alongside your attorney, your CPA, and when the time comes, your broker.
Can I sell part of the business and keep working?
Yes, and it is more common than a clean break. A minority sale gives you liquidity and takes some risk off the table while you stay in the operating seat. A sale to an ESOP can be structured so you keep a board seat or an executive role through the transition. An outside buyer will often require you to stay on for a defined period under an earn-out, which is a partial exit whether or not you planned it as one. What changes with each route is how much control you keep and when the money actually arrives, which is worth deciding deliberately rather than discovering at the letter of intent stage.
How is the sale of a business taxed in Arizona?
Arizona taxes the gain as ordinary income at a flat 2.5%, and allows a 25% subtraction on net long-term capital gains, which brings the effective state rate on those gains to roughly 1.875%. Our guide to the Tax Implications of Selling a Business in Arizona works through how the federal and state pieces interact.
Is exit planning only for large companies?
No. The smaller the business relative to your net worth, the more your retirement depends on that one asset transferring well, which makes coordination more important rather than less. What matters is that most of your wealth sits inside a single illiquid business. That is true for owners of every size.
A conversation, not a commitment
Ready To Talk To A Business Exit Advisor In Tucson?
No pitch and no product. A private review of where your business, your exit, and your personal finances stand today, and an honest read on the distance between here and the exit you want. You leave with a clearer picture, whether or not you ever work with us.
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