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3 companies looking to acquire my business and I feel lost. (alien.top)

submitted 11 months ago by spiderpigparty@alien.top to c/entrepreneur@indiehackers.space

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Hi everyone,

31 years old, no kids.

I own a small business, and have received offers in the region of £750k. Plus cash in the business would give me a total equity value of around £900k on exit.

I started it 5 years ago now, with the dream that one day it could be sold. Well that day has come and I’m in a very fortunate position of having 3 companies submitting offers.

But, instead of feeling excitement, I feel a sense of dread that I’m doing the wrong thing. This business has been everything for me for 5 years. At points I have genuinely thought it would end up killing me and through the toughest days and weeks the thought of the end goal was often what kept me going. So not to be feeling a huge rush of excitement and relief right now is a surprise to me.

I have 2 options.

Exit the business and take the money. in this situation I would invest the profits in property and lead a considerably lower stress, yet comfortable lifestyle.
The second option is reinvest our profits and try and take it to the next level. This would invoicing recruiting, advertisement and investment in our general operations. I’d be committing to another 2 - 5 years and going back in balls deep. Obviously the risk here is we dramatically lower our profitability by doing so and fail to scale any further. I worry we may then miss what could be a once in a lifetime opportunity to sell a business for decent money.

Not really sure what I’m expecting to get by posting this, but if anyone has thoughts or has sold a business themselves, did you experience this? Did you regret it post sale? All advice appreciated.

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[–] CSCAnalytics@alien.top 1 points 11 months ago (2 children)

Why pay taxes on $750,000 in one fiscal year, at the highest tax bracket, THEN placing what’s left into yield generating accounts?

Request that the funds be deposited into a company account, set to grow via safe, yield generating investments like treasury notes. Specify in writing that the business-owned account is non-withdrawable, except for an annual "salary" payment to you. Maintain a 5-10% advisory role on the board without additional responsibilities outside of advising the new owner. Opt for structured payouts on the yield for further tax advantages, enabling the business to retain sale proceeds on paper while you benefit from gradual income growth, reduced taxes, and a more tax-advantage yield strategy utilizing nearly the entirety of the proceeds.

Of course, consult a lawyer and accountant, but there are far better ways to structure the proceeds then being written a check for $750,000 in one tax year.

Here’s some napkin math on what that would cost you assuming 37% avg federal tax and 5% state:

**Remaining Balance: $750,000 - $277,500 (federal tax) - $37,500 (state tax) = $435,000

So this would cost you roughly $315,000 in taxes before you’re able to invest the proceeds into generating yield.**

[–] mmoonbelly@alien.top 1 points 11 months ago (1 children)

OP can make simpler by moving to holland, getting the 30% ruling and paying no tax on non-Dutch income.

Does mean staying outside of the UK for three and a bit years.

[–] CSCAnalytics@alien.top 1 points 11 months ago

Lol gave my entire answer assuming he was in the US. Oops!