Advice on selling a business
I am looking to exit from an ownership and operational role within my company. I have an equal partner who is not excited about this idea, but is a good guy and is willing to look at various ways to accomplish this (ie. compensate me for my equity).
Our company is a service business, is virtual (no capital assets), and is based largely (although not solely) on our relationship with clients. It is not a good candidate for sale to a third party, thus one of us will need to stay on board. He doesn't want to leave at this time. It is however, easy to manage, and highly profitable.
I'm looking for advice and help in two areas:
1) Method of compensation. My partner wants to minimize risk and would prefer obviously to pay me over time, instead of a lump sum. I'm agreeable to this, but we have to come up with a method that will work. For example, simply applying a formula and coming up with a valuation doesn't protect him if the company goes to hell after I leave. We've discussed a percentage of sales, but this doesn't relate to a specific value for the company, unless we bound it with minimum and maximum values perhaps.
2) I want to minimize my tax burden. The company is a California C Corp, about 10 years old. It seems as though I'd want to subject the payments to capital gains taxes and avoid the income tax. I won't need the money after the sale, so if there is some method for reinvesting it and delaying or avoiding taxes, I'm all ears.
Obviously I will need to talk to my accountant with regard to the tax issue, but I'm wondering if anyone on the board has done something similar to this and can offer any advice.
Thanks in advance.
I want to spend my last dollar on the very last day of my life.