You are close to the finish line. This is where it all comes together. 

The period leading up to selling your business is the most financially complex and the most critical. The decisions made in the 12-36 months before a sale can determine how much of your life's work you actually keep. The pre-exit stage is about designing a precise plan so that when the moment arrives, you're ready, and nothing is left to chance.

The Foundational Strategy and Strategic Growth stages were about building and protecting. Exit Architecture is about precision, and making sure every piece is in place before one of the biggest financial transactions of your life.

The goal is that by closing day, there are no surprises, no scrambling, and no regrets.

What founders may feel at the pre-exit stage: 

• Uncertainty about what happens next

           You have built your identity around your business. The thought of selling, and the impact that may have on your identity, can be both exciting and terrifying.

• Fear of the tax bill

           You have heard that selling a business triggers a large tax event. You are not sure how big, or if there's anything you can do about it.

• Protecting what you pass on

           You want to ensure your wealth will eventually be passed on in its fullest form to the next generation(s). 

• Wondering if you are ready for all that cash

           Soon, you may have millions in your bank account for the first time. Do you know where that capital should be held, and how it should be used?

How we help design your exit:

1. Building your exit blueprint

Before any deal is signed, we work with your accountant to map out exactly where the money will go: how much flows into personal accounts, what stays in corporate structures, what flows into trust accounts, and what flows externally (family or philanthropy). This blueprint helps ensure that your financial goals and values are equally considered, and a plan is set for when the exit eventually happens. 

2. Reducing the tax hit

In Canada, the Lifetime Capital Gains Exemption (LCGE) allows eligible business owners to shelter a significant portion of their business sale from tax. As of June 2024, this amount was increased to $1.25 million per person. If a Family Trust is in place, and family members are included as beneficiaries, their personal LCGE limits can also be used, significantly multiplying the net-of-tax exit outcome.

Working alongside specialized tax professionals, we help you understand exactly how much of your sale qualifies, what the remaining tax looks like, and how to plan for it in the years that follow.

3. Locking in legacy planning pre-exit

After a large liquidity event, legacy planning will be an important consideration. You will likely have more capital than you need to live comfortably and, as such, will experience significant growth in net worth from that point until your mortality date.

Insurance solutions can be a cost-effective way to protect what the next generation will eventually inherit. With the help of CIBC partners, we can provide these solutions in an affordable way prior to the exit. We can also help you explore philanthropic frameworks, such as private foundations, if giving back is part of your planned legacy.

4. Getting your accounts ready before closing day

One of the most overlooked aspects of selling a business is preparing for what happens with the proceeds after the deal closes. Without the right accounts in place ahead of time, your capital can sit idle, missing timely investment opportunities. We help you establish a complete account architecture before closing day, so your funds can be deployed as soon as the transaction is complete.

Check out the other phases of Kenny's Founder Formula

Phase 1: The Foundational Strategy phase (Startup Stage) of the Founder Formula is about building the financial foundation that gives your business the best possible start, and your future self the biggest possible payout.

Phase 2: The “Strategy” phase built the foundation. The Strategic Growth phase (Growth Stage) is where we start to fortify it. The decisions made around structure, protection, and taxation in this phase can directly determine how much of your business value you will actually keep throughout its growth journey, and when it comes time to exit.

Phase 4: The Family Stewardship phase (Post-Exit Stage) is the culmination of the previous three stages, and is the execution of a legacy plan that is as intentional, disciplined, and well-managed as the business you built.

Questions about The Founder Formula? Reach out to Kenny! Contact info below.