3 of the Biggest Mistakes Business Sellers Make
Last year, over 10,000 small businesses changed hands in the U.S., cashing out owners for millions. You’ve built your company, poured your life into it, and now you’re ready to sell (or maybe you already have). The payoff feels like the finish line, but here’s the catch: without the right moves, that windfall could shrink fast.
What many entrepreneurs don’t see coming: mishandling the proceeds from a business sale can tank your financial future – especially with tax implications and wrong investment moves waiting to take a bite.
Selling a business isn’t just about signing the papers. It’s a high-stakes pivot that can either secure your wealth or unravel it.
“The sale of a business is often seen as the ultimate goal,” says David Rae, CFP, “but without a plan for what comes next, you’re risking everything you worked for.”
For those cashing out big, this transaction demands a solid plan.
Some Jaw-Dropping Numbers
$370,000 – The average capital gains tax bill for a $2 million business sale, assuming a 20% federal rate for high earners (IRS, 2025).
75% – The share of business owners who regret not planning better for life after the sale (Exit Planning Institute, 2023).
$1.8 million – The median sale price of businesses sold in 2023, a figure that’s ripe for tax traps without smart moves (BizBuySell, 2023 Insight Report).
“I Thought I’d Be Set…”
Mark J. Kohler, a CPA and entrepreneur, recalls a client’s wake-up call: “I had a guy sell his company for $5 million, thinking he’d ride off into the sunset. But after taxes and bad investments, he was down to $3 million in two years – better planning could’ve saved him a fortune.”
His lesson? “You don’t just cash out and wing it – those proceeds need a strategy, or they’re gone.”
Three of the Biggest Mistakes Business Sellers Make
1. Ignoring Tax-Saving Options
A big sale means big taxes, unless you have the right strategies in place. “When you sell a business, capital gains taxes can eat up 20% or more of your proceeds,” Mark says, “but with planning – like using a 1031 exchange or structuring the deal right – you can keep a lot more of that money.”
2. Parking Cash Without a Plan
That lump sum feels safe in a bank, until it’s not. Some sit on millions of cash, losing value to inflation everyday – when they could’ve structured investments to grow it tax-efficiently.
3. Underestimating New Lifestyle Costs
Life after the sale isn’t cheap. Business owners often overestimate how far their proceeds will go especially if they’re used to reinvesting profits back into the company instead of living off them.
The Solution?
Expert Guidance Tailored for Your Payday
Most advisors aren’t equipped for the nuances of a business sale windfall. Generic advice won’t cut it when you’re juggling tax deadlines, investment options, and a whole new financial reality.
Find an Ideally Matched Financial Advisor
What if there was a way to get matched with a financial advisor who has the experience to service your needs and help you navigate your sale successfully? That’s the Invested Better promise…
Invested Better’s Advisor Match Tool connects you with advisors who can provide tailored solutions for your specific financial situation.
Unlike generic “find an advisor” services, InvestedBetter’s matching system considers:
- Your asset types and complexity
- Your income level and sources
- Your age and retirement timeline
- Your concerns and priorities
“Specialized tax advice can save business owners thousands – or even millions – when selling… It’s not just about closing the deal; it’s about maximizing what you keep and building a secure future.” –Mark J. Kohler
Take the First Step Toward Financial Peace of Mind
Don’t navigate this financial turning point alone. Try Invested Better’s free Advisor Match Tool to be connected with financial advisors who have the experience to service your needs.
Simply answer a few questions about your situation, your concerns, and your goals… Then you’ll be connected with an advisor who’s ideally suited for you.
Note: Invested Better’s matching service is completely free.
