Business owners in Gallatin County: how much of the sale price do you actually keep?
TESTBy Wade Hollis, CFP® · Founder & Senior Advisor ·
After taxes, debt payoff, transaction costs, and any portion of the price held back or paid over time, an owner in Montana commonly keeps well under the headline figure, sometimes far under. Knowing your likely net before you sign lets you negotiate the terms that matter instead of the ones that only sound good.
Start from the bottom, not the top
Buyers talk about enterprise value. You should talk about net proceeds. From the headline price, subtract what the business owes, what the deal costs, what is escrowed or earned out, and what the federal and state governments take. What is left is what you retire on.
The structure of the deal moves the tax
An asset sale and a stock sale are taxed differently, for you and for the buyer, which is why buyers push one and sellers push the other. Whether part of the price is allocated to a non-compete, to equipment, or to goodwill also changes the bill. These are negotiated, not fixed, and they are worth more than most owners realize.
Earn-outs and seller notes
An earn-out pays you later if the business hits targets you no longer control. A seller note pays you later if the buyer stays solvent. Both can be fine. Both should be valued at less than their face amount when you decide whether the offer is enough.
The part nobody plans for
Thirty years of work becomes one check, and the check has to pay for the next thirty years. We build that plan before the sale, so the owner knows the number the family needs and can walk away from a deal that does not reach it. If you are within a few years of a sale, the readiness check at /quiz/land-legacy-readiness is meant for land, but the business version of the same question is answered at /q/am-selling-construction-company-what-money.
Questions owners ask
Sometimes, through installment treatment or splitting real estate from operations. It depends on the structure you already have.
Owning the real estate and leasing it to the buyer can turn a sale into an income stream. It also ties you to the buyer's success.
Two years before you want to close. One year is workable. Three months is a rescue.
Educational only. Great Buffalo Private Wealth does not give legal or tax advice.