A Huge (and Avoidable) Mistake Sellers Make

Welcome back to the Mid Market Insider!

Today, we’re diving into why you need to analyze and consider the tax picture when looking at potentially selling your business.

Taxes are one of the most overlooked, and most complex, parts of selling a business.

When an owner gets a strong offer, the focus almost always goes to price and deal structure. That makes sense. But what often gets missed is how much of that number you’ll actually keep after taxes.

In some cases, taxes can take what looks like a great deal on paper and turn it into a major disappointment after closing.

And I get it, even after years in this space, the tax side of deals can still make my head spin.

The difference between capital gains and ordinary income alone can swing your final take-home by hundreds of thousands (or more).

Then there’s:

• Allocation of purchase price across different asset classes

• How depreciation recapture might impact the bill

• How goodwill is treated

It’s a lot.

One big misconception is that an asset sale vs. a stock sale is just a formality. But for the seller, the difference in tax treatment between the two can be enormous.

A stock sale is often more tax-friendly, but not always possible, depending on the buyer and the business structure.

The real takeaway?

You don’t want to be figuring this out after the LOI is signed.

That’s why I always recommend bringing in a qualified tax advisor or attorney early in the process, ideally before you even go to market.

The goal isn’t just to get a great offer. The goal is to walk away with the best possible net result.

Tax laws change often. What worked well for another owner last year might not apply to your situation today. And relying on general advice or back-of-the-napkin math can lead to some very expensive mistakes.

Good advice here isn’t a cost, it’s an investment. One that can easily pay for itself many times over.

So ask the hard questions early. Don’t just chase the biggest offer, chase the smartest outcome.

Because the best deals come down to what you actually keep.

And preparation makes all the difference.

Close with confidence. Walk away with clarity.

That’s all for today’s newsletter! Thanks for reading!

📅 Next Week:

In next week’s edition, I’ll be sharing the importance of differentiation in business, and why differentiation requires far more than "better quality and service."

Keep building,
Nick

P.S. 

If you want to discuss your business goals in greater detail, book a discovery call: