Upstate SC Web Design

About Upstate SC Web Design

Posts by Upstate SC Web Design:

The New Tax Landscape

If you’re considering buying or selling a business, the precarious state of the economy shouldn’t be your only concern. You also need to think about the potential for major tax law changes that could affect business owners and a few that could affect M&A transactions. You should be prepared to work with your advisors to navigate the new tax landscape.

Change will come. Tax changes are far from definite, and new policies will likely take time to pass through Congress and go into effect. Still, many tax experts believe that the current administration will be able to enact into law an increase in long-term capital gains tax, from the current 15% rate to 20%.

Higher taxes for some individuals and many companies are also likely. The White House has proposed to increase the top two income tax rates to 36% and 39.6%, from 33% and 35%, respectively. This could affect many small businesses because, as a 2007 National Federation of Independent Business survey found, about 15% of small-business owners and half of those with at least 20 employees claimed household incomes of more than $200,000 and likely fall into the top brackets.

Also, estate tax law changes could affect many business owners. Currently, the estate tax is scheduled to disappear in 2010 but resume in 2011 with a top estate tax exemption of $1 million and top estate tax rate of 55%. Many believe that lawmakers won’t allow the estate tax to expire and instead will make permanent the 2009 estate tax law, which provides a $3.5 million estate tax exemption and a top estate tax rate of 45%.

Defer no more. A policy that enables U.S.-based companies to defer paying taxes on overseas subsidiary income is also expected to change, and could affect some business buyers. Currently, tax laws allow U.S. companies to defer taxes on this income until the subsidiary transfers the money to the parent company. Going forward, however, companies will likely have to pay these taxes immediately. If your company buys a business with overseas operations, you’ll need to report all overseas income, which could be a major tax burden and reduce corporate income significantly.

Many believe that lawmakers won’t allow the estate tax to expire and instead will make permanent the 2009 estate tax law.

A few positives. Although some tax policy changes may make certain transactions less advantageous and more complicated, others can benefit M&A participants. For example, the Stimulus act passed in February extends the maximum net operating loss (NOL) carryback period to five years for qualified small businesses with gross receipts of $15 million or less. Generally, an NOL may be carried back only two years. The extended carryback period applies to 2008 (not 2009) NOLs and could help fundamentally sound but temporarily troubled companies with what is essentially a tax refund — boosting their bottom line and enhancing their sale prospects.

The Stimulus act also includes a provision for businesses, in certain situations, to defer cancellation-of-debt income (CODI) generated from repurchasing business debt after Dec. 31, 2008, and before Jan. 1, 2011, until calendar year 2014. This could be an incentive for a business seller to buy back debt and reduce its debt load.

Knowledge is power. If you’re considering selling your business or making an acquisition in the near future, a potentially higher tax bill or more-complex deal process could give you the incentive to speed up your deal. Before you act, however, discuss your plans with an experienced tax advisor. Tax and M&A professionals can work with you to mitigate the tax consequences of the new laws on your sale or purchase.

A Good Time to Sell a Business

Given the state of the financial markets and general economy, now may seem like an unlikely time to sell a company. But selling in the current market can actually be less challenging than you think — and may even provide benefits you haven’t considered.

Determining whether to sell is always a difficult and complex decision, involving many considerations specific to your plans and business. For example, how urgent is your exit plan and how much do you hope to realize from the sale? Although the current economic environment may factor into your decision, it shouldn’t be your primary consideration.

Bad news, good news. To sell your company at a fair price, you need only one buyer that really wants to acquire it. A global credit crunch means that some buyers have limited financing options right now and may not be looking for targets. That’s the bad news. The good news is that many of the buyers shut out of the current market are financial buyers — companies seeking opportunistic, short-term investments — such as private equity and hedge funds. The majority of those remaining are strategic buyers seeking synergies and other long-term advantages of an acquisition.

These buyers may be willing to pay more for a target that meets their specific needs. What’s more, companies that are profitable and not highly leveraged are regarded as attractive acquisition targets regardless of market conditions. Stable earnings and low risk are particularly prized in poor economies, and private companies immune to day-to-day stock fluctuations enjoy an additional advantage.

Owners of larger companies might want to explore whether selling their business in pieces — by division, subsidiary or asset — rather than as a whole is a favorable option. Partial acquisitions can be attractive to buyers who want a specific product line, hard asset such as a production facility or human resources such as a software development group.

Shaping up. As long as your company isn’t financially distressed and doesn’t have significant liabilities that may necessitate compromise, you should remain confident in its appraised value. Several strategies, however, can help improve your chances of selling well.

Reducing short-term debt, if at all possible, is near the top of that list. If you have outstanding loans or upcoming loan or bond financings, ensure that you’re current on payments. Few buyers will be interested in assuming additional debt from a prospective acquisition — particularly debt with onerous rates and terms.

A current business valuation that takes into account your company’s long-term performance is also essential. Buyers may try to get a reduced deal price by arguing that any recent performance declines due to a poor economy make your business a less viable acquisition. So you need to be prepared to show that historical earnings are solid and explain to buyers that they provide a better forecast for future performance.

Opportunities remain. If you put your company on the market only to encounter unappealing bids or even deafening silence, your effort isn’t in vain. Entertaining offers helps you understand what buyers are looking for. What’s more, displaying your strengths can put you on the radar of buyers that are financially constrained now but plan to make acquisitions once conditions improve.

With the assistance of experienced M&A advisors, you are very likely to find a fair price for your business. Good companies are always valuable — even in hard times.

Leveraged Recaps

If you’re thinking about selling your company but are frustrated with the current market, you may want to consider a leveraged recapitalization. These transactions can be risky, and in an uncertain economy you may not want to add debt to your balance sheet. However, for some companies looking to raise capital, a leveraged recap can be an excellent stopgap tool.

Debt for cash. In a leveraged recap transaction, a company accesses liquidity by assuming new debt — generally a significant amount for a specific purpose. The cash might be used, for example, to pay shareholders an extraordinary dividend, fund a major share repurchase program or finance a business acquisition.

Recaps usually take one of two forms:

The company borrows from a private equity group (which typically will want a 51% equity share) that then becomes a co-owner of the business, or
The company receives additional financing via new bank loans or new debt issuance. The size and terms of the recap depend on a variety of factors, including its purpose and the company’s current revenues and debt load. An already debt-heavy balance sheet generally harms a company’s leveraged recap prospects.

Reasons for a recap. Companies undertake leveraged recaps for a variety of reasons — primary among them, of course, is to raise cash. Recaps can offer enough liquidity to make an outright sale unnecessary. They also can improve your company’s chances of selling for a fair price in the future by:

Beefing up defenses. By assuming additional debt and reducing cash reserves, a company becomes less attractive to hostile bidders and, therefore, buys time until more appealing buyers emerge.

Lending more control. A recap can provide members of management with a larger number of shares and, thus, reduce the ability of dissident shareholders to force a sale.

Improving financials. It may seem like a paradox, but high debt levels can incentivize a company to improve its financial profile by reducing expenses and divesting itself of underperforming or nonessential units. The result can be a stronger company and more appealing acquisition target.

Some may be vulnerable. Leveraged recaps can be risky. A University of North Carolina survey of leveraged recaps in the 1990s found that companies had an average 17% debt-to-total-capital ratio before the transaction and a 50% ratio afterward. Such high debt loads typically make companies more vulnerable to general economic distress and market volatility. But if your company’s fundamentals are strong and you’re looking for an alternative to selling, a recap may be the solution for you.

Protecting Private Information

A confidentiality agreement typically is the first thing prospective buyers and sellers sign when they enter M&A deal talks. These legal documents may seem like a formality, but they provide the foundation for a transaction’s successful execution and shouldn’t be ignored.

A safe space. Confidentiality or nondisclosure agreements are designed to keep information that parties exchange during the due diligence and negotiations process private. Typically review processes involve documentation about research and development, product rollouts, hiring and expansion plans, and long term strategies.

NDA’s are legally binding agreements M&A participants use to enable candid and detailed discussions during deal negotiations. They’re particularly important for sellers who need to feel comfortable enough to disclose competitive information to a serious buyer, particularly when the buyer is a competitor.

Buyers and sellers frequently have different objectives and prerogatives when it comes to the NDA, so be prepared to compromise.

Don’t Neglect Stakeholders

Even when the general economy and the M&A market are booming, merger transactions can be hard to close. And when the economic climate is as uncertain as it has been recently, deals can seem like nearly impossible-to-reach goals. Although the selling company’s financial health and the buyer’s ability to get financing remain paramount concerns, neither party can afford to overlook another major factor — their stakeholders.

Who are your stakeholders? It probably seems like common sense that you’ll need to inform your company’s stakeholders as soon as you sign a sale agreement. The goal is to provide a constant, accurate stream of communication designed to head off rumors and to bring potential opponents into your camp as much as possible. But who, exactly, are your stakeholders?

You have many stakeholders — probably more than you usually consider. But the following all have some stake in your company’s future and need to be included in your M&A communication plan:

Minority shareholders or owners,
Employees and employee unions,
Customers and clients,
Suppliers and vendors,
Lenders and creditors,
Business and local media,
Beneficiaries of your corporate giving program,
Governments in the communities in which you employ workers, and
Government regulators, if applicable.

What links these disparate stakeholder groups is their connection to your company and, to be blunt, their ability to hamstring or even destroy a deal if they make an organized effort to oppose it. Disgruntled customers, a resistant employee union, disapproving editorials in your local paper or a government agency concerned about the impact of your merger can pose serious risks that you’d be foolish to ignore or underestimate.

A balancing act. As soon as your company has signed a sale agreement, quickly provide details of the deal to all stakeholder groups, using whatever channels best fit each. For example, you might inform customers through account representatives assigned to them, the local community via your media relations department and your employees through HR or department managers.

Keep in mind that communicating an M&A is a balancing act. Each group of stakeholders has its own priorities, which often can conflict with those of other groups.

For example, a buyer may plan to move all of the acquisition’s operations to its own location and, instead of relocating the target’s current employees, hire new staff from its own community. That community is likely to embrace the decision, but the news will be unwelcome to the seller’s employees, as well as the local government that relies on the selling company’s property taxes.

When dealing with this type of situation, be sensitive to the nuances in your general communications to all stakeholders and determine when it’s best to tailor messages to individual audiences.

During the M&A process, you may discover the deal will negatively affect one particular stakeholder group — for example, production workers in a particular facility will be laid off or a corporate giving program that benefits local charities will be discontinued. Your company should communicate these decisions to those affected while also detailing the benefits to other stakeholders.

So if employee consolidation is expected to reduce prices, share that with your customers. Or if trimming costlier and less efficient suppliers will help save jobs, let employees know. The bottom line: Get as many stakeholders on your side as possible.

Focused strategies. Most merging companies must contend with some resistance — both internal and external. Typically, the side with the best, most focused sales pitch wins the war. In addition to general facts and timing, communicate financial details to demonstrate the value of any changes associated with the deal. And consider setting benchmarks and mapping their progress in a public place, such as on a specially created Web site, so employees and other stakeholders can follow them.

This strategy worked for HP during its 2001 merger with Compaq. Promerger forces (led by HP’s CEO) set up a Web site, which it updated daily, sometimes even hourly. The site featured letters from senior management, detailed financials supporting the deal and in-depth responses to questions such as “Why support this merger?” Antimerger forces (led by

HP’s largest shareholder) were less organized and ultimately lost the battle for hearts and minds.

Cooperation is key. In the end, an M&A deal’s success depends on the cooperation of your company’s many constituents. Keeping stakeholders in the loop and treating communication as a critical part of the deal process.

No I in Merger

Selling or buying a company is time-consuming — even full-time — work. Owners and executives who expect to run their company as usual during the M&A process generally find that they can’t do both jobs well. By assembling a deal team made up of key employees and professional advisors, you relieve some of the pressure on yourself. Your company is also more likely to successfully complete a deal quickly.

Coaching the deal. Deal teams range in size from less than a handful of people to a dozen or more, depending on the size of the company and complexity of the proposed transaction. Teams are responsible for moving a deal through every stage of a merger — from initial inquiries and analysis to due diligence, negotiations and, in some cases, integration.

Although it’s usually led by a professional advisor or the company’s owner, CEO or CFO, an effective deal team should include representatives from all major areas of a company, including accounting, legal, IT, personnel, public relations, and, if the company has significant holdings, real estate. M&A, financial and legal professionals work with the team to draft a deal plan and timeline and help the members stay on course.

Following the game plan. Typically, a deal team starts by setting rules to protect confidentiality and establishing a line of command. The team’s leader should encourage open communication from all participants during every stage of the merger and give members clearly defined tasks that contribute both to the objectives of each stage and the ultimate goal. These might include:

Initial stage. A seller’s deal team needs to prepare the company for sale, prepare nondisclosure statements and a confidential business review, and put out feelers for potential buyers. A buyer’s deal team should size up potential sellers and select a

target.

Due diligence. At this stage, both buyer and seller teams are responsible for processing and organizing large amounts of information — including financial, legal and operational. Sellers should ensure that documents are available and easy to review and that procedures are in place to protect proprietary information. Buyers should strive to be as thorough as possible, given the usually limited timeframe.

Negotiations. Buyer and seller teams often work together to draft and edit the details of the purchase agreement. Financial advisors play a particularly important role if the parties encounter roadblocks on price and deal structure.

The team’s job isn’t necessarily over when the paperwork is signed. Companies often rely on their deal teams to handle employee and public communications and last-minute issues such as regulatory compliance. And buyer teams often conduct the integration process.

Best outcome. Mergers can be stressful for everyone, particularly company leaders. But if you distribute deal responsibilities among the members of a focused and well-organized team, your company can enjoy a much smoother process — and a better outcome.

Roll Up Deals

A roll-up deal occurs when a buyer acquires several businesses and combines them to form one larger company. This type of transaction is somewhat unusual, but it offers an intriguing option for certain buyers and sellers. A small business that would like to become part of a large, multinational company, for example, could find a roll-up appealing. Buyers looking to head off small competitors before they become major threats might also consider this strategy.

ON THE WAY BACK? Roll-ups were popular in the 1990s and early 2000s, but they got a poor rap in some circles for being hastily thrown together deals that lacked integration plans and long-term strategies. This reputation isn’t surprising given the fact that the goal of many roll-up buyers, particularly in the high-growth technology sector, was to combine companies, swiftly initiate a public offering of stock and then cash out.

Roll-ups have been less common in the recent rocky economic landscape. But the roll-up model, when executed correctly, can be appealing for certain businesses. The CEO of wireless prepaid phone service provider MetroPCS Communications, for example, recently stated that his industry is ripe for roll-ups. It has room for only two or three main players, he claims, but currently has five major ones, as well as a host of regional companies — all vying for the same business.

STRUCTURAL DESIGN. In a typical roll-up, the buyer acquires two or more “founding companies” that it then combines into one overall structure — a newly created holding company, for example. The founding companies are converted into subsidiaries of the new company, though buyers can also merge the various companies’ operations into one overall structure.

The success of a roll-up depends on the financial strength and smooth integration of the founding companies. Prime roll-up candidates usually:

Belong to certain sectors. The best roll-up targets are generally in industries dominated by small, regional businesses, such as funeral homes, recreational vehicle retailers, technology service providers, florists and landscaping services.

Don’t cannibalize their partners. The merged companies shouldn’t eat into one another’s business. Ideally, the rolled-up companies offer different or different-stage products (such as one making machine parts and another machine structures). Businesses that cover different geographic areas also are good candidates.

Keep management on board. Rolled-up businesses must be committed to the success of the new venture — owners can’t simply look to cash out and retire. The merged company’s board of directors typically is made up of representatives from all rolled-up businesses. And upper management often stays on after the transaction is completed.

MECHANICS OF THE DEAL Rather than slowly assembling the roll-up deal piece by piece, the buyer opens negotiations with all potential selling businesses simultaneously. The buyer signs letters of intent with all sellers and conducts due diligence concurrently.

If a public offering is planned, transactions with every selling company are pegged to close when the combined entity goes public. So the timing of a roll-up deal can be extremely tricky, requiring the advice and assistance of experienced advisors.

NOVEL APPROACH. Roll-ups aren’t for everyone, and they easily can collapse if they aren’t carefully considered or don’t receive the right guidance. But buyers with aggressive growth plans and sellers seeking a role in their company after the sale may want to consider this novel approach to an old challenge.

Help your roll-up avoid bumps

Because roll-ups involve more than the typical two parties, their chance of hitting bumps in the road to a successful closing are higher than with other M&A transactions. Sellers can help keep their deal from collapsing by:

Keeping the lines of communication open.
Beginning integration planning as soon as deal negotiations get underway, and
Remaining realistic during negotiations about what they offer their buyer — whether it’s cost savings, future revenues or new customers,

Roll-ups can be easy when all sellers become subsidiaries of the new company and remain largely intact. But they can be difficult when sellers combine their operations. In any case, there’s likely to be a fluid period during which new chains-of-command are developed, management is restructured and divisions or product lines are shut down. At this stage, excellent communication with all of the rollup’s parties is critical.

Holding on to Key Employees

During a company merger, the devil is in the details. Identifying key employees and employment issues early on can facilitate a smooth deal. And a communication plan can help prevent, for example, top-producing salespeople from defecting to competitors, decimating the company’s customer base, and affecting its value.

It’s important to offer employees incentives to stay, but you also need to anticipate potential legal issues. Plan now to put in place protections to prevent employees from disrupting your deal, both before and after it closes.

Research to retain. As soon as you begin entertaining the idea of a merger or acquisition, assess your current work-force. Enlisting the help of your human resources staff, interview managers and ask them to break down employee responsibilities and identify the top performers in each department. If units are to remain productive after the company changes hands, you must know which employees are responsible for the most — or most important — customer or client relationships.

If your company’s value relies heavily on research and development or intellectual property, be sure you know who the key brains are behind your brain trust. Without those individuals, your business may have much less future earnings potential and be a lot less attractive to a buyer. And though the topic is broad and beyond this article’s scope, begin reviewing patents and other intellectual property to ensure you, not your employees, own them.

Once you or the buyer determines which employees are essential, provide them with incentives to stay put. Depending on the nature of the business, the employee and the terms of the deal, this could be anything from stock options in the newly merged company to a guaranteed executive position to extra vacation time.

Don’t stop with the carrot, though — you also need to introduce the stick. Draft agreements that will prevent employees from walking away with the

cream of the company’s staff or the most profitable customers. If they haven’t already, top performers should sign noncompete agreements that prohibit them from directly competing against the company for a specific period of time.

Watch out for a common loophole, though. In some cases, employees will have noncompete agreements with their original employer (the selling business) that aren’t applicable to the newly merged company. If necessary, ask employees to sign new agreements.

Also keep in mind that noncompete agreements aren’t enforceable in some states, such as California, and under certain conditions, such as when agreements interfere with the employee’s ability to earn a living. Agreements that are unreasonable as to time, distance or purpose can also be deemed unenforceable, so discuss noncompete agreements with your legal advisors before asking employees to sign them.

Out in the cold. Next, assess whether your company has any employee-related legal exposure. Do you have reason to believe (for example, based on past disciplinary actions) that a manager will be sued for discrimination or other illegal on-the-job actions? Are you currently engaged in litigation with one of your employees over workers’ compensation benefits?

Potential buyers need to know about such situations because their outcomes can seriously affect future profitability.

People matter. The secret to managing employee issues during a merger is to be proactive. Determine which employees are critical and make sure paperwork is in place to keep them. Also communicate your merger plans to the larger company as soon as feasible and keep tabs on employee morale as the deal closing approaches.

Although all M&As encounter an unexpected obstacle or two along the way, employees don’t need to be one of them.

Buying Your Own Business

Buying your own business can be a complicated procedure. Throughout the buying process, it’s important to keep an open mind while searching for a business that will fit your needs, talents, skills and lifestyle. A business broker has many different types of businesses for you to consider; however, you need to remember that there is no such thing as that “perfect” business. Another vital thing to keep in mind is that at some point you must be able to make the “leap of faith” that separates you from being a “looker” to a “doer.” This isn’t easy, but it must happen if you are ever going to be in business for yourself. The following discussion of other key issues may help in the process:

Importance of Information: Understand that in looking at small businesses, you will have to dig out a lot of information. Small business owners are not known for their record-keeping. You want to make sure you don’t overlook a “gem” of a business because you don’t or won’t take the time it takes to dig out the information you need to make an informed decision. Try to get a understanding of the real earning power of the business. Once you have found a business that interests you, learn as much as you can about that particular industry.

Negotiating the Deal: Understand, going into the deal, that your friendly banker will tell you his bank is interested in making small business loans; however, his “story” may change when it comes time to put his words into action. The vast majority of small business transactions are financed by the seller. If your credit is good, supply a copy of your credit report with the offer. The seller may be impressed enough to accept a lower-than-desired down payment.

Since you can’t expect the seller to cut both the down payment and the full price, decide which is more important to you. If you are attempting to buy the business with as little cash as possible, don’t try to substantially lower the full price. On the other hand, if cash is not a problem (this is very seldom the case), you can attempt to reduce the full price significantly. Make sure you can afford the debt structure…don’t obligate yourself to making payments to the seller that will not allow you to build the business and still provide a living for you and your family.

Furthermore, don’t try to push the seller to the wall. You want to have a good relationship with him or her. They will be teaching you the business and acting as a consultant, at least for a while. It’s all right to negotiate on areas that are important to you, but don’t negotiate over a detail that really isn’t key. Many sales fall apart because either the buyer or the seller becomes stubborn, usually over some minor detail, and refuses to bend.

Due Diligence: The responsibility of investigating the business belongs to the buyer. Don’t depend on anyone else to do the work for you. You are the one who will be working in the business and must ultimately take responsibility for the decision. There is not much point in undertaking due diligence until and unless you and the seller have reached at least a tentative agreement on price and terms. Also, there usually isn’t reason to bring in your outside advisors, if you are using them, until you reach the due diligence stage. This is another part of the leap of faith necessary to achieve business ownership. Outside professionals normally won’t tell you that you should buy the business, nor should you expect them to. They aren’t going to go out on a limb and tell you that you should buy a particular business; in fact, if pressed for an answer, they will give you what they consider to the safest one: no. You will want to get your own answers–an important step for anyone serious about entering the world of independent business.

The Due Diligence Challenge

With the economy in the midst of a significant recession many private business owners are waiting to sell; however, pending increases in the long-term capital gains tax rate may point to an earlier exit.

Most business owners begin the process of selling a business by asking, “How much?” Financial planners advise, however, that the more important question is, “Is it enough?” From this perspective, taxes are a critical consideration.

Today the long-term capital gains tax rate for most private business owners is 15%, the lowest it has been in the U.S. since 1933. This low rate is the result of Bush-administration tax cuts enacted in 2003. The current rate is scheduled to increase after December 31, 2010, when long-term capital gains are to be taxed at 20%, assuming the Obama-administration and the Democratic majorities in the House and Senate do not enact new legislation to increase the rate further.

Many business owners considered selling their companies in the summer and fall of June 2008 based on a belief that a newly elected Democratic President would increase long-term capital gains rates in 2009. However, with the economic downturn in September and October of 2008 many of these owners decided to wait until the economic outlook improved. The good news for those that waited is that President Obama has yet to modify the Bush-administration tax policies, giving business owners up to two more years to sell a business and take advantage of the historically low capital gains tax rate (assuming President Obama and Congress do not modify tax rates in 2010).

Implications for Business Owners. If a business owner is considering a sale over the next three or four years he or she should carefully review and understand the tax benefits of completing a transaction by the end of 2010. For example, assume a healthy business with no debt earning $2.5 million of EBITDA¹ is worth $10 to $12.5 million today based on a multiple range of 4x to 5x EBITDA. The long-term capital gains tax paid by the owner would be $1.5 to $1.875 million (not including state taxes), respectively. If the Bush-administration tax rates expire and the new long-term capital gains rate is 20%, the owner will pay $2 to $2.5 million in taxes, or 33% more, if the transaction closes in 2011 or later.

However, if President Obama and the Democratic congress increase the long-term capital gains tax rate to 28%² or greater as has been speculated, the same business owner will pay 87% more in taxes, or $2.8 to $3.5 million. When the capital gains tax rate increases to 20%, the business would need to grow EBITDA by 6%, or the market multiple for the business would need to increase by the same percentage, for the owner to net the same proceeds after the Bush tax cuts expire. If the capital gains tax rate is increased to 28%, the business would need to increase EBITDA by 18% for the owner to net the same amount. Either way, the business owner must work hard to grow the business or rely on a market shift in order to get back to the same place. If he or she is considering retirement in conjunction with the sale, gearing up to grow the business and potentially working more hours, late nights, and/or weekends to make the same amount may not be an appealing proposition. There is also the added risk of holding a business for two or three years in the hope of a better economy: the economy or a specific industry

28% was the long-term capital gains tax rate in the late 1980’s and early 1990’s. June 2009 may deteriorate, further lowering the value for the business.

The Bottom Line. Trying to time the sale of a business to maximize proceeds is more challenging and complicated than trying to time the ups and downs of the stock market, something the brightest minds on Wall Street regularly fail to do. Selling a business takes a minimum of three months and may last well over a year. An owner’s energy and time may be better spent understanding what he or she needs to achieve from a sale in order to live his or her desired lifestyle. If the sale of a business can achieve an owner’s goals today, he or she should consider selling the business to spend more time with family, on hobbies, or with charitable pursuits. The value of an early retirement, in conjunction with long-term capital gains tax benefits, may make a sale in today’s market an attractive alternative.