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How to Avoid Pitfalls in Your Succession Plan With Roman Basi, The Center for Financial, Legal & Tax Planning

Episode: 134

Do you have a written step by step plan for what to do when you decide to transfer or sell your business? Do you know the best way to structure the transaction legally? How to minimize tax liabilities? To do the best by your family and employees?

That’s where The Center for Financial, Legal & Tax Planning comes in. Roman Basi is an attorney, CPA, real estate broker, and title insurance agent. He joined the family merger and acquisition consulting firm in the late nineties after exploring a variety of alternate career paths. The Center handles mergers and acquisitions of privately held companies, as well as succession, strategic, and tax planning for companies across the U.S.

One of the best things that you could do as a business owner, Roman says, is educate yourself on the process. And it’s never too early to start! Roman recommends beginning with a valuation of the company.

Knowing the value of the business and the lifestyle you want to maintain after transitioning out helps lay a solid groundwork for the questions and recommendations to follow. Are we going to sell the company to somebody? Are we going to gift the company to somebody? Are we going to sell stock to somebody? Are we going to sell access?

While this may sound straightforward, the potential pitfalls are plenty. One of the most common is failing to take into consideration what you, as the owner, will end up with at the end of the deal. They say, oh, I’m gonna sell my business for 3 million, 5 million, 10 million, a hundred thousand, whatever it may be. And they don’t really know what they’re gonna walk away withuntil we get close to closing. The solution is a tax minimization analysis, starting with the selling price of the business, minus the expenses of the sale including broker commissions, legal, title work, and accounting, along with any liabilities the buyer may assume.

Additionally, recognizing that due diligence on the part of the buyer can lead to a lengthy transaction process and staying on top of your adjusted financials throughout is essential. There’s also the question of real estate. According to Roman, When I look at these succession plans as a whole, the back end of the succession plan is really estate planning. Often the recommendation includes establishing a trust in order to avoid property going into probate.

More questions? Roman welcomes you to visit or reach out directly to Preparation, knowledge and understanding – it’s going to save you so many headaches when you do come down to that final point, when you’re ready to transfer your business.


That’s really the goal of a lot of those startup entities that we work with, is to make sure that we’ve got them on the right successful track. So years from now, if they do decide to transfer it or sell it, we can structure it in the best wayfor their families and their employees.

If there’s not a lot of capital around and there’s not a key employee that’s gonna sit there and buy the entire company, then an ESOP can be a very good way to transfer the business.

We’ve done a valuation… So we know what we think the price is, but what is the owner gonna walk away with?

The most important thing you can do is don’t give a buyer just raw financial data without making any adjustments to them.

Be ready, be prepared, and stay on top of those financials now, during the deal, until the deal’s closed.






Distribution Talk is produced by The Distribution Team, a consulting services firm dedicated to helping wholesale distribution clients remove barriers to profitability, generate wealth and achieve personal goals.

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