Category: Valuation

Seven Things Buyers May Pay More for When Purchasing a Business

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Buy and Sell Agreements, Company Wealth, evaluations, Inside Sale, Key People_Or Group, Passive Ownership, retirement, Selling Your Business, Strategies of growing business, Tax Efficient, Valuation, Value drivers, Working On Your Business


By: Thomas J. Perrone, CLU, CIC

How to Build a More Valuable and Transferable Company

Many business owners ask:

What is my business worth?

That is an important question. But an even more valuable question may be:

What can I do today to make my business worth more in the future?

When buyers evaluate a company, they are not simply looking at past revenue. They are evaluating the company’s ability to generate future cash flow—and the risks that could prevent that from happening.

Businesses with dependable earnings, strong customer relationships, capable employees, effective systems, and less dependence on the owner may be more attractive to buyers.

Here are seven things buyers may be willing to pay more for because you build the business around strong value drivers. 

1. Predictable and Growing Cash Flow

Revenue is important, but consistent profits and reliable cash flow are often more meaningful.

A company with steady earnings may be more attractive than a company with higher but unpredictable profits. Buyers want confidence that the business can continue generating cash after the sale.

Business owners should focus on improving profit margins, controlling unnecessary expenses, and creating a history of dependable financial performance.

2. Recurring Revenue and Strong Customer Relationships

Recurring revenue can make future earnings easier to predict.

Service agreements, subscriptions, maintenance contracts, memberships, and repeat customers may provide greater visibility into future revenue.

Buyers may also look at customer retention and customer concentration. A company that depends heavily on one or two customers may present more risk than a business with a broad and diversified customer base.

An important question is:

Are customers loyal to the company—or primarily loyal to the owner?

Customer relationships that can continue after the owner leaves may increase the company’s transferability.

3. A Business That Can Operate Without the Owner

Owner dependence can reduce business value.

If the owner is responsible for most sales, customer relationships, major decisions, and daily operations, a buyer may question what will happen after the owner leaves.

A useful test is to ask:

Could the company continue operating successfully if the owner were absent for 30, 60, or 90 days?

transferable it may become.

4. A Strong Management Team and Capable Employees

Buyers are not only acquiring the company’s assets. They may also acquire the knowledge and experience of their employees.

A capable management team can provide continuity and help the business maintain its performance after a sale.

Business owners should identify key employees, develop future leaders, and create strategies that encourage important people to remain with the company.

A business with leadership depth may be less dependent on any one individual.

5. Documented Systems and Operating Processes

Businesses are often more transferable when important processes are documented and repeatable.

Written procedures for sales, employee training, customer service, pricing, quality control, and financial management can help a buyer understand how the company operates.

Strong systems may also improve consistency, reduce errors, and make the business easier to manage.

The goal is to build a company that operates through reliable systems—not simply through the owner’s experience and memory.

6. A Sustainable Competitive Advantage

Why do customers choose your company instead of a competitor?

Your advantage may be a compelling reputation, specialized expertise, proprietary technology, a recognized brand, a unique service model, or long-term customer relationships.

The key is whether that advantage is sustainable and difficult for competitors to duplicate.

A strong competitive position may help protect customer relationships, support healthy profit margins, and create greater confidence in the company’s future.

7. Clean Financial Records and Lower Business Risk

Buyers need to understand the company’s financial performance.

Accurate and timely financial records can make it easier to evaluate revenue, expenses, profits, cash flow, and future opportunities.

Buyers may also examine risks involving customer concentration, debt, legal issues, insurance, technology, employee obligations, and ownership agreements.

Reducing risks can be just as important as increasing revenue.

The Common Factor: Buyer Confidence

These seven value drivers have one important thing in common:

Buyers may pay more when they have greater confidence in the future of the business. 

They want confidence that:

– Cash flow will continue.

– Customers will remain.

– Employees and management can operate the company.

– Systems are documented and repeatable.

– The company has a sustainable competitive advantage.

– Financial information is reliable.

– Business risks are identified and managed.

Two companies with similar revenue and profits may receive very different valuations because one is more predictable, less dependent on its owner, and easier to transfer.

Build Value Before You Need to Sell

Business owners should not wait until retirement is approaching to begin building value.

Improving cash flow, developing management, documenting systems, reducing owner dependence, and strengthening customer relationships may take years.

These improvements can benefit the owner even if the business is never sold. A stronger company may produce greater profitability, reduce owner stress, improve operational efficiency, and provide more choices for the future.

Through the GWT Planning System®, Business owners can evaluate where their company is today, identify opportunities to build and protect value, and develop strategies for converting business equity into future financial security.

The goal is not simply to build a business that someone else wants to buy.

The goal is to build a business worth owning, worth protecting, and worth paying more for. 

tperrone@necgginc.com

Wish To Discuss Lets Talk:  Toms Calendar

203.530.6615

Website: www.bpbpgrp.com/Tom

Resources:

Free Download Business Building Guide Call “  Growing Your Business On Purpose”

Podcast: What Buyers Really Look For When buying Your Business!

You Built the Business. Now Let’s Make Sure It Pays You Back.

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Company Wealth, Estate Planning, Income from your business, retirement, Selling Your Business, Uncategorized, Valuation, Value drivers, Working On Your Business

By: Thomas J. Perrone, CLU,CIC -New England Consulting Group of Guilford, Inc.

A planning system that helps business owners build value in their business,  stop overpaying taxes, stop losing wealth, and creates  business value and aa path so they can walk away from their business with their wealth, and on their own terms.

The Problem

“Many business owners struggle to build personal wealth because business cash flow demands keep their money tied up. Our three-step process creates financial clarity, helps reduce wealth lost to taxes and uncertainty, and positions owners to walk away wealthy when it’s time to exit.”

Most business owners struggle with creating future wealth for their personal economic security because their businesses require so much of the financial resources and cash flow to continue to operate and grow the business.

You started with nothing but an idea and a willingness to outwork everyone else. Years later, you’ve built something real — payroll, customers, a name people trust.

But here’s what nobody tells business owners: most of your wealth is trapped. It’s tied up in a business that’s hard to value, harder to sell, and taxed at every turn. Your “retirement plan” is a vague hope that someone, someday, will buy the company for what it’s worth.

Meanwhile, every year you wait:

  • You overpay taxes on money you’ve already earned
  • Inflation and poor structuring quietly erode what you’ve built
  • Your business becomes more dependent on you, not less — which makes it harder to sell or step back from

You didn’t spend decades building this business just to hand the upside to the IRS, or to find out too late that no one wants to buy it.

You built it so you could walk away wealthy.

The Guide

That’s the problem I solve for with business owners — not as a generalist financial advisor, but as a specialist in one specific question:

How do you turn the value locked inside your business into wealth in your own hands?

I understand how hard you’ve worked—and how much of that effort has yet to become personal wealth. I learned this firsthand when my father died at 51 with nearly all his business value trapped inside the company. The company was ultimately sold for pennies on the dollar. The heartbreak my family endured motivated me to make sure other business owners would never have to experience a situation like ours.

A Three Step System to Extract the Wealth You’ve Built When You Need It the Most!

#1 GROW — Find out what your business is worth AND if you are taking advantage of all the planning opportunities available to you. A three-minute survey, called the Business Owners Personal Viewpoint, gives us enough info to create a “WHERE YOU ARE REPORT”. (A Barometer of your business).

We start with a clear-eyed look at your business value today, and what’s driving — or hurting it. Also, what areas of your planning are effective and ineffective up to now!

#2 PROJECT WEALTH — Stop the leaks- and missed opportunities!

We find where you are overpaying in taxes and where your personal wealth is exposed — then fix it. “OUR DISCOVERY REPORT”

#3 TRANSITION — Build your exit before you need it

We build the plan that lets you leave the business — by choice, not by crisis — with the money in your pocket, not just the memories. It is a plan by “Design” and not a plan by “Default”.

Resources:

Check out this video:  “Business Owners Getting This Wrong: A trapped Retirement plan. 

Get your Free Report: Building Wealth Through Your Business!

Want to discuss, use my calendar:  Toms Calendar  

 

 

Traction: Get a Grip on Your Business

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Company Wealth, Passive Ownership, retirement, Selling Your Business, Strategies of growing business, Valuation, Value drivers, Working On Your Business

Traction: Get a Grip on Your Business

by Gino Wickman

Letting Go of the Vine

Get a Grip on Your Business

FROM GINO WICKMAN’S TRACTION

By Thomas J. Perrone, CLU, CIC

Overview

Before Wickman introduces the Six Key Components of the Entrepreneurial Operating System (EOS), he uses to address a mindset barrier that stops many owners from ever adopting the system in the first place. The chapter’s central image is an entrepreneur clinging to a vine, unwilling to release it even though holding on is what’s limiting the business’s growth. Wickman’s point is that real progress requires a leap: letting go of old habits and control patterns so the business can reach the next stage, much as a person swinging through a jungle must release one vine to grab the next.

He frames this as a deliberate choice among three options available to any frustrated owner:

  1. accept the business as it is,

  2. walk away from it, or

  3. commit to changing it.

This article is written for owners who choose the third path.

One of the most important drivers of business growth is having the next level management team in place and a team that communicates with leadership, and sees the leadership vision. This sounds easier than it is. Without the next level management, the value of a company is tremendously discounted, if even a consideration on the market by purchasers.

I believe building the “team” is the most profitable task owners can engage in as it is their future profitability. It is also one of the most challenging task, but very doable.

Four Fundamental Beliefs

Wickman argues that before EOS tools can work, leadership has to internalize four beliefs:

1. Build and maintain a true leadership team. — A small group who together define and champion the company’s vision, hold clear accountabilities, and act for the good of the whole organization rather than just their own department.

2. Hitting a ceiling is inevitable. — Growth naturally creates limits — organizationally, departmentally, and personally — and those ceilings have to be anticipated and broken through repeatedly, not treated as failure.

3. Run the business on a single operating system. — Rather than stitching together a patchwork of borrowed management ideas, the organization commits to one consistent system, applied the same way at every level.

4. Stay open-minded and vulnerable. — Leaders need enough humility to admit they don’t have every answer, which is what allows new tools and honest feedback to actually take hold.

Five Leadership Abilities for Breaking Through the Ceiling

To act on belief #2 — pushing past inevitable ceilings — Wickman says leaders must build five specific abilities:

1. Simplify. — Strip unnecessary complexity out of the business so people and processes are easier to manage.

2. Delegate and elevate. — Hand off work you’ve outgrown so both you and your people can focus on the responsibilities that best fit them.

3. Predict. — Build the discipline of long-term and short-term forecasting instead of reacting to problems as they land.

4. Systemize. — Turn recurring work into repeatable processes so outcomes don’t depend on any one person’s memory or effort.

5. Structure the company correctly. — Design an organizational structure that fits where the business is headed, not just where it’s been.

Why This Matters

Wickman’s underlying message is that most owners aren’t held back by a lack of information — they already have what they need to change. What’s missing is the willingness to release direct personal control: to trust a real leadership team, commit to one system, and let go of habits that made sense at a smaller scale but now cap the business’s growth. This chapter functions as the mental preparation for the rest of the book, setting up why the Six Key Components (Vision, People, Data, Issues, Process, and Traction) are worth the discipline required to implement them.

Video: Your Business Isn’t Worth What You Think-Here’s Why

Download Free Guide-Growing Your Business On Purpose

Questions, let talk: Tom’s Calendar

www.bpbpgrp.com/tom

Why Most Businesses Never Reach Their Full Value And the One Shift That Changes Everything

by YOUR BUSINESS WORTH, posted in Company Wealth, Working On Your Business, Selling Your Business, Strategies of growing business, Value drivers, Valuation, Business Growth and Transition

By Thomas J. Perrone, CLU, CIC

This article discusses business growth, increasing business value and business planning. Why some companies grow and other don’t grow. 

Most business owners assume that if revenue keeps climbing, value climbs right along with it. It’s a reasonable assumption — more sales should mean the company is worth more. But revenue and value are not the same thing, and mistaking one for the other is one of the most expensive misunderstandings an owner can carry for 20 or 30 years.

Revenue measures what a business did last year. Value measures what a buyer believes it will do next year — without you. That single distinction is the reason so many profitable, well-run companies still fall short of their full value when the time comes to sell, recapitalize, or pass the business on.

A business that cannot run without its owner isn’t really a business to a buyer. It’s a job. And jobs don’t sell for much.

The Real Reason: Value Is Built by Structure, Not Activity

Owners who work harder every year often assume that effort alone will be rewarded at exit. But buyers, banks, and private equity firms don’t pay for effort — they pay for transferable, durable cash flow. That requires structure the business owner rarely has time to build, because they’re too busy running the business to build the business.

In our GWT Planning System® — Growth, Wealth, Transition — we see this pattern constantly. Owners pour everything into Growth, assume Wealth will follow automatically, and treat Transition as a someday problem. By the time someday arrives, the gap between what the business earns and what it’s actually worth has become impossible to close quickly.

The Four Traps That Quietly Cap Value

In our work with business owners, four recurring traps show up again and again — often overlapping, always compounding:

  • Owner Dependency — sales, key relationships, and critical decisions all run through one person. Remove that person, and much of the value disappears with them.
  • Cash Flow — the business generates activity, not predictable, bankable cash flow a buyer can underwrite with confidence.
  • What-If — no plan exists for disability, death, partner disputes, or a sudden offer to buy. Without a plan, the business (and the family) absorb the full shock.
  • Exit — there’s no timeline, no valuation benchmark, and no transition plan, so “someday” keeps sliding further into the future.S

What Buyers — and Full Value — Actually Require

Businesses that command premium valuations share a few traits in common, and none of them are about being the biggest company in the room:

  • Documented systems instead of knowledge that lives only in the owner’s head
  • A management team that can run operations without the owner present
  • A diversified customer base, so no single relationship can sink the company
  • A clear, credible growth trajectory a buyer can step into and continue

None of these require the owner to work more hours. They require the owner to work differently — shifting time and attention from working in the business to building the business’s transferable value.

The Good News

This is entirely fixable, but it isn’t fixed overnight. Most owners need a runway of three to five years to move a business from owner-dependent to fully transferable — which is exactly why the planning has to start well before you think you’ll need it.

The earlier that shift begins, the more options an owner has when it’s time to transition: a strategic sale, a transfer to family or key employees, or simply the freedom to step back without the business falling apart. Owners who wait until they’re ready to sell before addressing these gaps almost always leave money, and options, on the table.

The goal isn’t just a good business that provides a good living. It’s a valuable business — one that thrives without you, and that someone else will pay top dollar to own.

Below download the Definitive Guide To Value Drivers. FREE.

For more information view this video: https://youtu.be/5hfj0IvCXx0

Check out Podcast

Complimentary Discussion Phone Call

www.bpbpgrp.com/tom

Definitive Guide To Value Drivers

The Asset Gap: The Silent Threat to Your Exit Plan

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Buy and Sell Agreements, Company Wealth, Estate Planning, Selling Your Business, Strategies of growing business, Testimonial Page, Transfer Costs, Valuation

By Thomas J. Perrone, CLU, CIC (Excepts from John Brown’s “The Definitive Guide To Addressing The Asset Gap. (Thank you John)

Why the number in your head may have nothing to do with the number you actually need — and how to find out before it’s too late to fix.

The Asset Gap: The Silent Threat to Your Exit Plan

Most business owners believe they know two numbers cold: what their business is worth, and what they’ll need to live on once they sell it. Those two beliefs quietly shape every decision an owner makes about timing an exit, negotiating a deal, and walking away with peace of mind. The uncomfortable truth is that for the vast majority of owners, at least one of those numbers is wrong — and the gap between belief and reality has a name: the Asset Gap.

What Is an Asset Gap, Really?

The Asset Gap is simply the difference between what a business owner currently has and what that owner actually needs to exit the business on his or her own terms. It sounds like a straightforward math problem. In practice, almost no owner has done the math.

Every real Gap Analysis asks five questions:

  • Is your financial security goal accurate, or unrealistically low?
  • Have you accurately quantified the resources available to you today?
  • Do you have an Asset Gap — a shortfall between what you have and what you need?
  • How big is that gap?
  • What must you do to close it?

Here is the number that should stop every owner in their tracks: only 18% of business owners have ever discussed their exit with an Exit Planning Advisor. The other 82% are running their most important financial decision on assumptions, sentiment, and hope — often until it is too late to do anything about it.

The Misperception Spell

John H. Brown, founder of the Business Enterprise Institute, gave this problem a name: the Misperception Spell. It describes what happens when the information an owner is using to plan an exit is vastly different from the facts. Six assumptions feed the spell most often:

  • The amount of income they’ll need after they exit
  • How long they and their spouse will live
  • The rate of return they expect on invested assets
  • The value they assign to their company
  • The growth rate they predict for value and cash flow
  • The net proceeds they expect from a sale

The Misperception Spell isn’t a character flaw — it’s just what happens when nobody has run the numbers.

Francis: A Gap Analysis in Action

Consider Francis, a business owner who was confident he had no Asset Gap at all. When his numbers were finally tested against the facts, the picture changed dramatically.

What Francis TrackedHis AssumptionThe Facts (After Gap Analysis)
Business value$1.5 million$1 million (appraised, pre-tax)
Post-exit income needed$120,000 / year$200,000 / year (pre-tax)
Years of retirement funded25 years33 years (life expectancy)
Withdrawal / return rate7%4%
Investable assets needed~$2 million$4.5–5 million

The result: a real Asset Gap of $2 to $3 million — not the $0 gap Francis believed he had. Every one of his assumptions was reasonable. Every one of them was also incomplete or optimistic in a way that, left unchecked, would have surfaced only after he could no longer fix it.

The Asset Gap as a Map

Every client’s journey toward a successful exit has four elements, and they answer four simple questions: Where are you? Where are you going? What’s the distance? How do you get there?

  • A Starting Point — business value (after tax), non-business investments, and expected Social Security.
  • A Destination — the investable assets needed, based on life expectancy and spending needs.
  • The Distance — the dollar gap between what an owner has today and what the goal requires.
  • The Map — a step-by-step plan, built with the owner’s Advisor Team, to close the gap by the exit date.

A Small Investment Buys Real Facts

Francis’s full Gap Analysis — a business appraisal, a CPA review, and a financial planning assessment — cost him $5,000. Professional valuations of this kind typically run $5,000 to $10,000: a modest price next to the cost of building an entire Exit Plan on guesses.

A real Gap Analysis pays off in five ways. It:

  • Clears misperceptions before they sabotage the Exit Plan
  • Keeps owners in control of their business and their timeline
  • Replaces assumptions with facts the whole Advisor Team can use
  • Puts the upfront cost in context against the far greater cost of guessing wrong
  • Motivates owners to act sooner, while there is still time to close the gap

Be the Exception

Most owners discover the true size of their Asset Gap only when they are ready to exit — the one moment when it is hardest, and sometimes impossible, to do anything about it. You do not have to be one of them.

Review the five Gap Analysis questions early, and revisit them often. Replace sentiment and hope with facts from a real Advisor Team. Give yourself the best chance to exit when you want, for the money you need, to the person you choose.

Ready to Find Your Number?

If you have never had your own Asset Gap quantified, now is the time — not the year you plan to walk away. Take the three-minute Business Owner Viewpoint Survey to get your own “Where You Are” report, or reach out directly to start a conversation about your Gap Analysis.

Thomas J. Perrone, CLU, CIC

President & Founder, New England Consulting Group of Guilford, Inc.

203.530.6615 | tperrone@necgginc.com

Source contribution: John Brown and the Business Enterprise Institute, Exit Planning Series.

Case Study: Rapid Sales Growth and Ownership

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Buy and Sell Agreements, Company Wealth, Estate Planning, Funding your Buy and Sell, Key People_Or Group, Strategies of growing business, Valuation, Working On Your Business

Case Example Using Term Insurance

By Thomas J. Perrone, CLU, CIC

This was a situation where the company needed protection but wasn’t ready to purchase permanent insurance, even though the situation called for it.  However, the term insurance gave them what they wanted at the time and gave them the needed protection. 

Scenario: 

 A thriving business, comprising three partners—a relationship builder, an idea generator, and a product engineer—experienced remarkable sales growth within a few years. However, a potential challenge arose regarding ownership transfer upon a partner’s death, as all partners shared familial ties. 


To mitigate this concern, a comprehensive stock redemption program was devised and funded through a term insurance policy with a premium exceeding $60,000. This strategic approach enabled the business to navigate ownership transfer complexities and ensure the continuity of its operations.

Through the years, parts of the term insurance has been converted, and the company is paying about $125,000 in insurance premium to fund their liabilities and commitment.  

The case was developed through a relationship i had with one of the owners, through an introduction.  

Lesson:  

Even though this was a start up and a young company, if I has assumed it did not have the cash flow, I would have lost out on all the great potential.  Don’t assume anything, but let your client tell you what they want and why. 

THE WHY: 

There was a past history of the one of the current partners where their family member was part of a company where the partner died.  No planning was done, so the deceased partners family became the new partners.  This was not pretty, and the business ended up in chaos.  Obviously, a motivating factor for the current owner to have a good Buy and Sell Agreement where it was funded 

If you are an advisor who is working with business owners or wants to develop a business market segment in your practice, we should talk. We offer great opportunities working with our organization and deep backup.  

Thomas J. Perrone, CLU, CIC

tperrone@necgginc.com

Buy and Sell Agreement Tutorial

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Buy and Sell Agreements, Company Wealth, Estate Planning, evaluations, Funding your Buy and Sell, Income from your business, Key People_Or Group, Passive Ownership, retirement, Selling Your Business, Valuation, Value drivers

By: Thomas J. Perrone, CLU,CIC

and Sell arrangements that have emerged since the Connelly case.

The tutorial delves into the rationale behind the utilization of these arrangements and elucidates their advantages.

Furthermore, a comparative analysis of the funding costs associated with different Buy and Sell Agreement structures is presented.

FREE BOOK “UNLOCKING YOUR BUSINESS DNA” FREE DOWNLOAD

https://www.allclients.com/Form3.aspx?Key=4F3D16E276A4EC0C73BFDC182AA06C23

Connelly – Alternative 2024 

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Buy and Sell Agreements, Company Wealth, Estate Planning, evaluations, Funding your Buy and Sell, Life Insurance Types, Selling Your Business, Valuation

Thomas J. Perrone, CLU, CIC

Connelly was a hard case to digest as most of us who have been around the planning world for an exceptionally long time. We took the consequences of funding a stock redemption agreement as very normal.  As normal as “cutting the end of the ham first.”  

We are now forced to rethink this situation after the ruling, care must be taken when arranging the Buy and Sell Agreement and funding of a company, to avoid the results we have seen in Connelly.   

Today I will bring you through a few options that advisors and business owners may consider when planning the transition of business interests.   

  CLICK HERE;     YOUR REPORT WILL DOWNLOAD IMMEDIATELY! 

tperrone@necgginc.com

Sharpening Your Planning Skills to Get Ready  

by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Buy and Sell Agreements, evaluations, Funding your Buy and Sell, Income from your business, Inside Sale, Passive Ownership, Selling Your Business, Strategies of growing business, Valuation, Value drivers

By Thomas J. Perrone, CLU, CIC

Last month I posted a video on some of the general planning tools you have not used in the past eight years because of the Jobs Act.  That is because of the high limits on the unified estate and gift tax amount.  The high limits sheltered many estate owners and business owners from an estate tax.  With the possible change around the corner it’s time to get ready.   

This month I share how to use some of the tools discussed and why.  Enjoy the video.  

For your free Sunset 2026 Planning Guide, CLICK THIS LINK  

The Guide will automatically download.   

PREPARE FOR 2026 AND GET ENGAGED WITH THE MARKET

ESTATE PLANNING The LOST FOCUS

Featured by YOUR BUSINESS WORTH, posted in Business Growth and Transition, Estate Planning, Funding your Buy and Sell, Life Insurance Types, retirement, Selling Your Business, Strategies of growing business, Valuation, Working On Your Business

By Thomas J. Perrone, CLU, CIC

Since the exemption credit increased to a substantial amount a few years ago, the term “estate planning” took on a new meaning.  

At one time  estate planning was considered tax planning along with other aspects of planning of your estate, depending on whether you owned a business or not.  Things like income for the family, debt payments, taxe reduction, income tax planning, and of course distribution of assets.  There was always an emphasis on avoiding estate and state estate taxes.  

However, as the exemption credit increased to the point that most American tax payers  would be exempt, the emphasis change on how estate planning was done.

However, in 2025 the sunset provision will kick in and will redefine the estate planning landscape.  The provision is set to go back to the exemption credit of about $600,000.  However, most professionals feel it will be higher.  Anyone’s guess.

With the possibility of lower exemption, estate planning will change.  I personally feel small business owners will feel the impact more than most, as their business values will increase their potential exposure to Federal and State estate taxes.   

Estate planning is an essential aspect of managing a small business. It can help ensure that your business is preserved as you want it to be, and that it can continue to operate smoothly even after you pass away. Part of estate planning for business owners will be to focus on the transition of the business more than before. If the exemption is lowered, small business owners will find themselves having to deal with a large tax at their death, upon the transfer of the business. Much can be avoided by doing planning now and using the exemptions available today.

Areas that need planning are:  

  1. Drafting a will and basic estate plan.
  2. Planning for tax efficiencies.
  3. Sorting out issues in family-owned businesses.
  4. Drafting a buy-sell agreement (for multi-owner businesses).
  5. Purchasing life and disability insurance.
  6. Creating a succession plan.
  7. Having a discussion with affected parties.

In order to have a proper discussion about estate planning the short video below will help you understand the main concept of asset distribution.  If you are a small business owner, this information may be critical to your planning structure.  

Request our FREE ESTATE PLANNING GUDIE FOR BUSINESS OWNERS:

For our FREE ESTATE PLANNING GUIDE FOR BUSINESS OWNERS, submit this short form AND the Estate planning guide will download immediately.  

The Guide covers many of the areas you need to understand when doing your estate plan. It is also written in language you will understand.  

Download Your Free Estate Planning Guide 

CLICK HERE

For a better understanding of Estate planning view this short video of how asset distributions work in different estates.

Note: I engage in a working relationship with professional advisors for their business cases.

203 530 6615

tperrone@necgginc.com