Selling your business:
beyond the headline price

You can watch the full interview here, or read the edited highlights below.

How do you know when it’s the right time to sell your business?

There is no single answer. Every entrepreneur and every business is different. For some, the decision is driven by favourable market conditions or an attractive valuation. For others, it’s about succession planning, stepping back after building a successful business, or recognising that the next phase of growth requires a different owner or management team.

Many entrepreneurs also reach a point where they want to pursue new opportunities, whether that’s investing elsewhere, starting another business or focusing on their personal priorities. Ultimately, the right time depends on both the business and the people behind it.

When should exit planning begin?

Far earlier than most business owners think. Ideally, planning should begin several years before a sale is even contemplated. Waiting until a buyer appears often leaves very little opportunity to improve the business structure, address tax issues or implement more efficient ownership arrangements.

A business should always be ‘sale ready’. That means having the appropriate structures, documentation and processes in place long before negotiations begin. Good preparation not only reduces risk during due diligence but also strengthens your negotiating position when the right opportunity arises.

What is the first step when working with a client who is considering a future sale?

The process starts with understanding the people behind the business. Before analysing the corporate structure, it's important to understand the family, their values, their long-term objectives and the roles different family members play within the business. Only then does it make sense to assess whether the current ownership and business structures are appropriate for a future sale.

Selling a business is not simply a commercial transaction. For many entrepreneurs, it means letting go of something they have spent years, or even decades, building. Recognising that emotional and personal dimension is an essential part of the planning process.

Why isn’t the headline sale price the most important number?

Because it isn’t necessarily the amount that ultimately ends up in your bank account. The real objective should be understanding what you want to retain after taxes, transaction costs and other obligations have been taken into account. Two businesses may sell for exactly the same price but leave their owners with very different amounts of wealth.

That’s why the ownership structure, tax implications and transaction design should all be considered well before negotiations begin. Planning around these factors can materially improve the outcome without changing the headline purchase price.

What are some of the biggest mistakes business owners make?

One of the most common mistakes is focusing exclusively on the commercial aspects of the deal while overlooking the tax consequences.

By the time a sale agreement has been signed, many of the key decisions have already been made, leaving little opportunity to improve the tax outcome. In many cases, the commercial agreement works perfectly, but the tax implications are far more onerous than the seller anticipated.

Business owners should ensure that commercial advisers and tax specialists work together throughout the transaction, so the legal structure of the deal supports both the commercial objectives and the desired financial outcome.

How important is having the right advisory team?

It is one of the most valuable investments a business owner can make. Selling a business requires expertise across several disciplines, including tax, legal, fiduciary, estate planning and investment management. Trying to navigate the process alone can prove costly.

An experienced team helps prepare the business for sale, identify potential risks early, structure the transaction appropriately and support negotiations. They also bring valuable market knowledge that can help business owners achieve a better overall outcome.

What should entrepreneurs think about after the sale?

The sale itself is only one part of the journey. An equally important question is: 'What does life look like after the business has been sold?'

Understanding that future vision helps shape many of the decisions made before the transaction takes place. It influences how the business should be owned, whether trusts or companies are appropriate, how family members will benefit, and how wealth should ultimately be transferred.

These considerations become even more important when families have members living in different countries or where beneficiaries have different tax residences.

How should business owners prepare for managing their wealth after an exit?

Many entrepreneurs spend decades successfully managing a business but suddenly find themselves responsible for managing a substantial investment portfolio instead.

Without a clear plan, the proceeds from a sale can simply sit in a bank account while important investment and wealth planning decisions are delayed.

Planning for this transition should begin before the business is sold. That includes developing an investment strategy, establishing retirement plans, considering estate planning and ensuring the proceeds are invested in a way that aligns with the family's long-term objectives.

The transition from business owner to investor is significant, and having a structured plan helps make that shift far smoother.

Why should families be part of the planning process?

Because business succession and wealth preservation extend well beyond the transaction itself. Business owners need to consider how wealth will support their own lifestyle, what should be preserved for future generations and how assets will ultimately be transferred. Family governance, estate planning and clear communication all become increasingly important once the business has been sold.

Taking these issues into account early creates a more integrated wealth strategy and reduces the likelihood of unintended consequences later.

What’s the single most important piece of advice for business owners?

Don’t wait until there’s a buyer. As soon as selling the business becomes a possibility, surround yourself with the right team of advisers. Early planning creates far more opportunities to optimise the ownership structure, improve tax efficiency, prepare the business for sale and ensure your personal, family and financial objectives remain aligned.

A useful analogy is completing a jigsaw puzzle. You don’t leave the border pieces until the end – you build the framework first. Selling a business works in much the same way. With the right foundations in place, the entire process becomes more structured, more efficient and ultimately more successful.

For further information, please contact Stanley Broun at stanleyb@privatewealth.sanlam.co.za or Andrew Bryson at andrewbry@privatewealth.sanlam.co.za.