^Blog What Does Business Exit Planning Look Like When You Work With a Multi-Family Office?

Most business owners have an accountant, a lawyer, a financial advisor, and perhaps an insurance specialist. But here’s a question worth considering: Who’s making sure all those professionals are working toward the same outcome?

For many business owners, the answer is nobody. Instead, the owner becomes responsible for coordinating advice, making decisions, and ensuring everything gets implemented properly. Their advisors might meet with them once or twice a year, provide recommendations within their respective areas of expertise, and then leave the implementation up to the owner.

The problem isn’t necessarily the quality of the advice. It’s that the advice is often provided in isolation. Your accountant might recommend one strategy, your investment advisor another, and your lawyer may be working with information that hasn’t been updated in years. Without coordination, valuable planning opportunities can be missed.

This is where working with a multi-family office can make a significant difference. A multi-family office acts as your financial quarterback, bringing together the various professionals involved in your financial affairs and ensuring their recommendations align with your personal, business, and family objectives.

At Three60 Wealth, our role is to provide that coordination for business owners preparing for an eventual exit. To illustrate what this looks like, let’s walk through a typical business exit planning journey, beginning ten years before a potential sale and continuing well into retirement.

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Years 10–7: Building Your Financial Foundation

The first stage is about understanding where you stand financially, where you want to go, and what needs to happen to get there. We begin by developing a comprehensive wealth plan that brings together your personal and corporate financial affairs. This includes a net worth statement, investment and insurance summaries, a corporate structure diagram, financial objectives, and long-term financial projections.

Creating the plan is only the beginning. The real value comes from identifying planning opportunities, prioritizing them, and coordinating their implementation.

Getting Your Corporate Structure Right

One of the first areas we examine is your corporate structure. Depending on your circumstances, this might involve establishing holding companies, removing non-business assets from your operating company, cleaning up intercorporate loans, or considering a family trust.

We’re generally trying to accomplish three things: establish a corporate structure that supports a future tax-efficient business sale, create flexibility to move money efficiently between corporations and eventually to family members for their personal needs, and ensure the corporate structure aligns with the family’s estate planning objectives.

For example, perhaps you own the commercial building your company operates from. When you eventually sell the business, you might want to retain the building and pass it along to your children. That decision needs to be considered well before the sale because the ownership structure can have significant tax and estate implications.

Protecting Your Family and Your Business

Next, we review your estate planning documents, including your will, power of attorney, and personal directive. We also consider what happens if you die or become disabled before the business is sold.

Who would operate the company? Would your family receive the full value of the business? Could the company continue functioning without you? These are important questions, particularly when the business owner remains heavily involved in daily operations.

Depending on the circumstances, life insurance, disability protection, succession arrangements, and improvements to the management structure may all play a role in protecting the business and the family’s financial future.

Understanding What You Need From the Sale

Perhaps the most important part of this initial stage is determining how much money you actually need from selling your business. We begin by understanding your desired retirement lifestyle, anticipated spending, existing investments, and savings capacity. From there, financial projections help establish the after-tax proceeds required to support your objectives.

Imagine your business is currently worth $4 million, but your retirement projections indicate you need $10 million from the eventual sale. That’s an important gap to identify ten years before retirement because it gives you time to grow the business, build investments outside the company, and adjust your financial strategy. Discovering that same gap a year before selling could leave you with some difficult decisions.

Related reading: Why Business Exit Planning Should Start 10 Years Before You Sell.

Years 7–3: Aligning Your Business and Personal Wealth

With the foundation established, attention turns toward building wealth and improving the business’s eventual saleability. During this stage, you’re typically still focused on growing your company while funding your family’s lifestyle.

Building Retirement Wealth Outside the Business

Many successful business owners accumulate significant wealth inside their operating companies, but not every dollar of profit needs to remain there. When excess capital is available, a properly structured holding company may allow funds to be transferred from the operating company through intercorporate dividends, generally without immediate corporate tax, subject to applicable tax rules.

Those funds can then be invested to build wealth outside the operating business. The objective is to establish investment assets that will eventually help fund retirement.

At the same time, we coordinate how money is withdrawn to cover personal expenses, including vacations, home renovations, education costs, and helping children financially. The source and timing of these withdrawals can have significant tax implications, making coordinated planning particularly important.

Making Your Business Less Dependent on You

Another important objective during this phase is making your business more attractive to potential buyers. Many entrepreneurs take pride in being indispensable. They’re the person customers call, employees depend on, and managers turn to whenever something goes wrong.

While that dedication may have helped build the company, it can become a liability when it’s time to sell. A buyer wants confidence that the business can continue operating successfully after the founder leaves. That may require developing a management team, improving financial reporting, strengthening operational systems, or reducing dependence on key customer relationships.

A multi-family office doesn’t replace a business consultant or fractional CFO. Instead, we identify where specialized expertise is needed and coordinate the appropriate professionals. The goal is to build two valuable assets simultaneously: a business that can operate without you and personal wealth that doesn’t depend entirely on selling it.

Related reading: The Years Before Selling Your Business Could Be Your Most Valuable.

Years 3–0: Preparing for the Business Sale

As the anticipated exit approaches, the planning becomes more focused. The corporate structure needs to remain suitable for the proposed transaction, including reviewing eligibility for the Lifetime Capital Gains Exemption where applicable. Retirement investments continue to grow, and financial projections are updated.

The primary focus now becomes preparing both the business and its owner for the transition.

Preparing the Business for Buyers

Selling a business is similar to selling a home, although considerably more complicated. Before putting your house on the market, you’d repair what needs fixing and make sure the property presents well. The same principle applies to a business.

Potential buyers will examine your financial statements, management team, customer relationships, contracts, operational systems, and numerous other aspects of the company. Weaknesses that you’ve lived with for years can suddenly become significant concerns.

Depending on the size and complexity of the business, conducting preliminary due diligence before going to market can help identify and address potential problems. The objective isn’t perfection. It’s demonstrating that the company is well-managed and prepared for a transition.

Knowing Your Numbers Before Engaging an M&A Firm

Before engaging an M&A advisory firm, we update your retirement projections to establish how much after-tax money you need from the sale. Once those numbers are understood, they can be compared against the estimated value of your business.

If the expected proceeds are sufficient, you may be ready to proceed. If they’re not, you have decisions to make. You might adjust your retirement expectations, continue building the business, or postpone the sale.

Once you’re ready, we can help identify and interview suitable M&A advisory firms, coordinate with your professional advisors, and provide support throughout the transaction. Selling a business is demanding, and you’ll need to keep the company performing while responding to buyer requests, navigating due diligence, and managing negotiations.

Having a coordinated planning team helps ensure the financial implications of decisions aren’t overlooked during what can be an emotionally demanding process.

Preparing Yourself for Life After the Sale

There’s another aspect of exit planning that often receives far too little attention: your identity.

For decades, you’ve been the business owner. People depend on you, your decisions matter, and your days are filled with purpose. What happens when that suddenly stops?

Many owners discover that their professional relationships and daily responsibilities disappear much faster than expected. That’s why preparing for retirement should involve more than financial projections.

Start developing interests outside the business, spend time discussing your future with your spouse, and consider what activities, relationships, and goals will give your next chapter meaning. A successful exit isn’t just about getting out of your business. It’s about having something meaningful to move toward.

Related reading: Selling Your Business? The Last Three Years Can Make or Break Your Exit.

Years 0 and Beyond: Turning Business Wealth Into Personal Freedom

Once the transaction closes, the financial planning doesn’t end. In many ways, a new phase begins. You’ve spent decades accumulating wealth, and now that wealth needs to support your lifestyle for the rest of your life.

Managing the Proceeds and Tax Liabilities

The first year or two following a business sale can be financially complicated. You may receive cash at closing, payments from a vendor note, or additional proceeds through an earnout arrangement. At the same time, significant tax liabilities may arise, and depending on the transaction, alternative minimum tax could also become a consideration.

A portion of the proceeds should generally be reserved in liquid, low-risk investments to cover anticipated taxes. Once the first post-sale tax return is filed, the final liability becomes clearer.

This is also when we review how the remaining proceeds should be allocated between personal investments, registered accounts, and corporate investment structures.

Replacing Your Business Paycheck

Before selling, your income likely came from salary, dividends, or both. After selling, your income may come from several different sources, including holding company dividends, RRSP withdrawals, TFSA withdrawals, non-registered investments, pension payments, and proceeds from the transaction itself.

The challenge is deciding how much to withdraw from each source and when. Your income requirements will also change over time. Perhaps you’ll spend more on travel during the first few years, followed by a period of lower expenses.

Coordinating withdrawals from different investment accounts can help manage your overall tax liability while providing the cash flow you need. This is where years of advance planning can pay off.

Planning Your Family’s Financial Legacy

Once the transaction is complete, retirement projections should be updated using your actual financial position. How much can you comfortably spend? How long will your money last? What amount is likely to remain for your children?

Perhaps you’ll discover that your estate is projected to be substantially larger than you intended. That could lead to discussions about helping family members during your lifetime or supporting charitable causes.

Your will, powers of attorney, and any family trust arrangements should also be reviewed to reflect your new circumstances.

Related reading: You Sold Your Business. Now How Do You Turn That Money Into Retirement Income?

The Real Value of Working With a Multi-Family Office

When you look at the entire planning journey, one thing becomes clear: your financial decisions are interconnected.

Your corporate structure affects your taxes. Your taxes affect your retirement income. Your retirement goals affect how much your business needs to sell for. And your estate planning affects how wealth will eventually pass to the next generation.

Yet many business owners continue to manage these decisions through separate advisors, each working within their own area of expertise. The real value of a multi-family office isn’t simply having access to more financial advice. It’s having a planning team take responsibility for coordinating that advice, identifying opportunities, and helping ensure recommendations are implemented.

For business owners approaching an exit, the objective shouldn’t simply be to sell the company for the highest possible price. It should be to turn decades of hard work into lasting financial security, greater freedom, and a fulfilling next chapter of life.

Achieving that outcome requires planning long before the business goes up for sale.

How Prepared Are You to Exit Your Business?

If you’re considering selling your business in the next three to ten years, understanding where you stand today is an important first step.

At Three60 Wealth, we’ve developed the Three60 Exit Score Assessment to help business owners evaluate their readiness for an eventual sale. The assessment can help identify areas of your financial and business planning that may deserve additional attention before beginning the exit process.

Complete the Three60 Exit Score Assessment to start evaluating your exit readiness.

About the Author

Jason Nagel | Founder, Three60 Wealth

Jason Nagel is the founder of Three60 Wealth, a Canadian multi-family office specializing in helping business owners prepare for successful transitions before and after the sale of their companies.

With over 25 years of experience working with business owners, Jason focuses on coordinating the financial, tax, estate, retirement, and succession planning considerations involved in transitioning from business ownership to financial independence. Learn more at www.three60wealth.ca