As of April 2016, there were 75 million baby boomers, and about 10,000 of them turn 65 every single day.1 So, it may not be surprising that many business-owning boomers plan to exit their businesses in the coming years. But something we discovered that is surprising, if not somewhat troubling, is this:

Many of those who own a business wait until they are on the brink of retirement to think through an exit strategy.2 The reasons for this lack of pre- planning may be many and likely personal, since the decision to exit a business, particularly one built from the ground up, is very personal and complex for its owner.


Still, the fact that owners do not have an exit plan is surprising, since few people understand the importance of planning better than entrepreneurs. To help those who are contemplating a liquidity event to do some pre-planning, this article outlines a few key topics business owners should consider when preparing for a sale.


Whether baby boomers expect to sell their businesses to a third party, or plan to sell to employees, owners should assemble a team of professionals with expertise in these transactions. Owners who expect to pass the business on to family can have several options, including a partial transfer of their interest or a transfer of nonvoting interest, allowing them to retain some control.

Investing for retirement and investing afterward require very different strategies.


If selling a business goes hand in hand with a desire to retire, an owner should first assess post-sale annual income needs with a detailed cash-flow analysis. Doing this helps determine the wealth-planning strategies to enable an owner to realize his or her goals for the family. An owner should also factor in requests from a purchaser that he/she stay on the board and/or remain in some temporary leadership capacity after the sale. This can impact an actual “retirement” date, but also may prove financially beneficial to retirement funding.



Appropriate tax planning is an essential component of a pre-sale strategy. Comprehensive analysis, including financial and estate-planning before the exit, can help an owner understand income tax treatment and potentially minimize his or her estate tax burden.

Determine an investment strategy going forward: Investing for retirement and invest- ing afterward require very different strategies. Income from running a business may need to be replaced by the proceeds of a liquidity event that requires carefully thought-out strategies that sync with the owner’s needs and risk tolerance.


Very specific rules and further complexity surround gifting business interests to a charitable entity. It is important for an owner to consult with tax and/or legal professionals, along with other financial professionals, to help ensure that he or she is aware of all the nuances and how they might impact a financial plan.

In sum, business owners who pre-plan post-sale strategies before a liquidity event may maximize and pass on to their heirs the well-deserved rewards of their vision and hard work.

1Millennials Overtake Baby Boomers as America’s Largest Generation, report, Pew Research, April 2016.
2 news/2016/02/07/baby-boomers-plan-your- businessexit-strategy-now.html. accessed October 25, 2016.

Bryan Stephens and Kathleen Entwistle are Financial Advisors with UBS Financial Services Inc. at 61 South Paramus Road, Paramus, NJ, and 299 Park Avenue, New York, NY 10171. UBS Financial Services Inc. Financial Advisor(s) engage Worth to feature this article. In providing wealth management services to clients, we offer both investment advisory and brokerage services which are separate and distinct and differ in material ways. For information, including the different laws and contracts that govern, visit The strategies and/or investments referenced may not be suitable for all investors. UBS Financial Services Inc., its affiliates and its employees are not in the business of providing tax or legal advice. Clients should seek advice based on their particular circumstances from an independent tax and/or legal advisor. The views expressed herein are those of the author and may not necessarily reflect the views of UBS Financial Services Inc. a subsidiary of UBS AG. Member FINRA/SIPC.

This article was originally published in the December 2016/January 2017 issue of Worth.