Here's How You Can Protect Your Business

Should You Sell Your Construction Business? Part 3

In parts one and two of this three-part series, the Orlando construction lawyers at Cotney Construction Law discussed a range of topics related to selling your construction business. We answered important questions that contractors should ask before selling their business including:

  • Is it time to walk away from my construction business?
  • Who can help me sell my construction business?
  • How can I plan ahead to make selling my construction business simpler?
  • Who can purchase my construction business?

Now, we will answer two other important questions regarding the sale of your construction business:

  • Is selling on my own a viable option?
  • Will taxes restrict the value of my buyout?

Remember, if you are planning on selling your construction business, consult an Orlando construction lawyer for assistance with negotiating, drafting, and reviewing your sales contract so you can increase the value of your sale and walk away with extra money in your pocket.

Is Selling On My Own a Viable Option?

Deciding whether or not you are capable of selling your construction business on your own is entirely dependent on whether or not you’re willing to make compromises. Selling your business requires a substantial amount of time and effort, and most owners simply don’t have the leeway to step away from their day-to-day duties to focus on finding and securing a buyer.

Many owners wear themselves thin trying to compensate with longer work days, but the resulting lack of sleep and increased stress can only derail things further. Additionally, you don’t want to provide subpar service to any active projects that could hurt your reputation, and therefore, the value of your business. You may find that selling on your own is not a viable option, in which case you should consult an Orlando construction lawyer who has experience helping contractors sell their businesses.

Will Taxes Restrict the Value of My Buyout?

Typically, the transaction between the business owner and the buyer will be taxed according to capital gains laws. The tax implications of selling your business can be steep, but there are alternatives to a traditional buyout. For example, you can utilize a cash balance buyout to sell your construction business. This type of buyout can help you and the buyer reduce taxation on your sale by combining a buyout with an existing 401(k) plan. When handled by an experienced Orlando construction lawyer, a cash balance buyout can mitigate tax costs, increase your payouts, and lower the barrier of entry for the new owner.

If you would like to speak with an Orlando construction lawyer, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.