Business Exit Planning
Business Owner Exit Planning in Minnesota
Business owner exit planning is the process of coordinating the financial, tax, and investment decisions surrounding the sale or transfer of a business so the owner can transition to personal financial independence with clarity and confidence. For Minnesota business owners, a dedicated exit strategy can mean the difference between a transition that delivers long-term security and one that leaves significant value on the table.
Why It Matters
Most Business Owners Are Not Financially Ready to Exit
For many Minnesota business owners, the company represents the largest single asset they own, often accounting for the majority of their total net worth. Yet most exit planning conversations begin too late, typically within 12 to 18 months of an intended transaction, leaving little time to optimize the tax structure, transition personal finances, or verify that post-sale income will sustain the lifestyle they have built.
A liquidity event, whether a strategic sale, management buyout, employee stock ownership plan (ESOP), or family succession, triggers a cascade of financial decisions that compound quickly: How will proceeds be invested? What combined federal and Minnesota state tax exposure exists? Is the anticipated sale price enough to fund decades of financial independence? These are not questions that can be answered well under transaction pressure. They require a coordinated strategy built years in advance.
At New Horizons Boutique Financial Services, we work with business owners across Lake Elmo, Stillwater, and the greater Twin Cities region to build that strategy before the transaction begins, so each decision is made from a position of clarity rather than urgency. Explore our financial independence planning guide to understand how we define readiness before any exit conversation begins.
What Exit Planning Involves
The Four Pillars of a Comprehensive Exit Strategy
Effective business owner exit planning is not a single event. It is a multi-year coordination of four interconnected financial disciplines, each of which affects the others. Missing any one of them can reduce the long-term value of your exit.
Business Valuation Coordination
Understanding what your business is worth, and what drives that value, is the foundation of any exit strategy. We coordinate with your valuation professionals and business advisors to align your personal financial goals with a realistic transaction range. Value enhancement strategies implemented years before a sale may strengthen your negotiating position, though outcomes depend on market conditions and buyer interest.
Tax-Efficient Exit Structures
The structure of your transaction, asset sale vs. stock sale, installment arrangements, charitable vehicles, and the timing of proceeds can significantly affect your combined federal and state tax exposure. Tax planning integrated with your exit timeline may reduce unnecessary tax liability, though the effectiveness of any approach depends on your specific situation and current law. See our tax planning guide for high-income individuals for a broader overview of these strategies.
Post-Liquidity Investment Strategy
Transitioning from business ownership, where you had direct operational control, to managing a large investment portfolio is a significant shift in both mindset and risk profile. Post-sale investment planning focuses on capital preservation, sustainable income generation, and diversification. All investment strategies involve risk, including the potential loss of principal, and past performance is not indicative of future results.
Personal Financial Independence Verification
Before any exit proceeds, the most important question is: will the anticipated sale price, combined with existing assets and expected income, sustain your desired lifestyle for the rest of your life? We model multiple scenarios across different exit values, timelines, and spending rates to help you answer that question with confidence, not assumption. Results vary based on individual circumstances and market conditions.
Minnesota-Specific Considerations for Exiting Business Owners
Minnesota's tax environment creates distinct planning challenges that advisors without deep state-level experience may underestimate. Understanding these factors before the transaction is critical.
No Preferential Capital Gains Rate
Unlike the federal tax code, Minnesota taxes long-term capital gains as ordinary income. For high-earning business owners, this means state tax exposure on sale proceeds can reach the top marginal rate of 9.85% as of 2026, adding meaningfully to the federal tax burden. Transaction structure and timing decisions should account for this from the outset.
Timing and Income Layering
A large one-time receipt of sale proceeds layered on top of existing business income in a single tax year can push a Minnesota business owner into a compressed bracket environment at both the state and federal level. Multi-year planning, installment sale analysis, and income smoothing strategies may help reduce this exposure, depending on transaction structure and buyer terms.
Post-Sale Income Transition
Business owners are accustomed to drawing income from a business they control. After a sale, that income source disappears and must be replaced by investment income, distributions, Social Security, and other sources. Planning this transition carefully, including understanding Minnesota's treatment of retirement income, is essential to maintaining financial stability in the years following an exit.
Our Approach
Strategy Before Transaction, Not After
Most financial advisors engage with business owners after a transaction closes. At New Horizons Boutique Financial Services, we build the financial strategy before the transaction begins. This means your investment plan, tax structure, income model, and post-sale lifestyle analysis are in place before you sit across the table from a buyer.
Our boutique structure is intentional. We limit the number of client relationships we maintain so that every business owner working with us receives direct advisor access throughout the entire exit planning process, from initial readiness assessment through post-sale portfolio management. There are no templates, no handoffs to junior staff, and no generic recommendations. Every strategy is built around your specific business, timeline, and financial goals.
This same philosophy applies to executives navigating major career transitions. If you are a professional approaching a similar inflection point, our page on financial advisors for professionals seeking clarity outlines how we approach those conversations.
What a Strategy-First Exit Engagement Includes
The Team Behind Your Exit Strategy
Business exit planning sits at the intersection of corporate finance, personal tax strategy, investment management, and estate planning. The New Horizons team brings the academic and professional credentials to navigate that complexity across all four disciplines.
Lars Engman, MBA brings graduate-level business and finance training to the structural and strategic dimensions of exit planning, including transaction analysis, valuation frameworks, and post-sale portfolio design. His experience working with business owners in complex financial transitions informs every engagement.
Alec Engman, B.S. Economics, University of Minnesota brings analytical rigor to the quantitative modeling that underlies exit readiness analysis, including income projection, tax scenario modeling, and investment planning.
Both advisors hold FINRA Series 7, Series 63, Series 65, and Series 66 registrations, and are Life and Health Insurance licensed, allowing comprehensive engagement across the full scope of a business exit strategy.
Lars Engman, MBA
FINRA Series 7, 63, 65, 66 | Life and Health Insurance Licensed
Graduate business training applied to transaction structure, valuation coordination, and post-exit portfolio design.
Alec Engman, B.S. Economics, University of Minnesota
FINRA Series 7, 63, 65, 66 | Life and Health Insurance Licensed
Economic analysis and quantitative modeling applied to exit readiness, tax scenario planning, and income sustainability.
Lake Elmo, MN Office
8647 Eagle Point Blvd, Suite B, Lake Elmo, MN
Serving business owners across the Twin Cities metro and greater Minnesota. Schedule a conversation at our Lake Elmo office.
The Planning Timeline
How Exit Planning Unfolds Over Time
A well-structured exit planning process typically spans three to five years. The specific steps and timeline vary based on your business type, exit method, and personal financial situation.
Financial Independence Assessment
Before any exit discussion begins, we analyze your current assets, liabilities, income needs, and spending projections to determine what sale proceeds are required to sustain financial independence. This baseline answers the most important question: does the number you have in mind actually work? Explore our financial independence planning guide for a detailed overview of this process.
Multi-Year Tax Strategy Development
We build a forward-looking tax plan that models your combined federal and Minnesota state tax exposure under multiple exit scenarios. This includes analyzing transaction structure options, installment sale arrangements, charitable planning opportunities, and retirement account optimization in the years leading up to your exit. Tax strategies involve trade-offs and their effectiveness depends on your specific situation and applicable law at the time of the transaction.
Transaction Coordination and Support
As the transaction progresses, we work alongside your attorneys, CPA, and business broker to ensure the financial strategy remains aligned with the evolving deal structure. Our role is to represent your personal financial interests throughout the process, not the transaction itself, and to help you evaluate offers against your post-exit income requirements.
Post-Sale Investment and Income Planning
Once proceeds are received, we implement the post-sale investment strategy designed during the planning phase. This includes establishing a diversified portfolio structured around your income needs, risk tolerance, and long-term goals. We provide ongoing quarterly reviews to adapt the strategy as your circumstances, market conditions, and planning priorities evolve over time. Investment outcomes are not guaranteed and depend on market conditions.
Common Questions
Frequently Asked Questions
When Should a Business Owner Start Exit Planning?
Business owners are generally well served by beginning exit planning three to five years before their intended transaction date. This window allows time to implement tax strategies, address gaps in personal financial readiness, build a post-sale investment framework, and complete value-enhancement initiatives that may improve the business's attractiveness to buyers. Owners with shorter timelines can still benefit from strategic planning, though the range of available options may be more limited. The right time to start is usually earlier than it feels necessary. For a structured approach, the 5 Ds of exit planning offers a useful framework for sequencing these decisions.
What Is the Tax Impact of Selling a Business in Minnesota?
Selling a business in Minnesota can trigger both federal and state tax liability on the gain recognized from the sale. At the federal level, long-term capital gains may be taxed at preferential rates depending on how the transaction is structured and how long assets have been held. Minnesota, however, does not offer preferential treatment for long-term capital gains, taxing them as ordinary income. As of 2026, Minnesota's top marginal income tax rate is 9.85%. Combined with federal taxes and the net investment income tax, total tax exposure on a business sale can be substantial. Transaction structure, timing, installment arrangements, and charitable strategies may reduce this exposure in ways that vary significantly by situation. Consult a qualified tax advisor for guidance specific to your transaction.
How Do I Find a Financial Advisor for Selling My Business?
Look for a financial advisor who specifically offers exit planning services and has direct experience working with business owners through liquidity events, not just general financial planning. Key factors to evaluate include their approach to tax strategy, their understanding of post-sale investment planning, their willingness to coordinate with your existing legal and accounting team, and their compensation structure. Advisors who prioritize strategy development before making any product or investment recommendations, and who offer direct access to the advisor rather than a support team, tend to provide the most cohesive guidance through a complex process. Our page on finding a financial advisor for major financial transitions provides additional context on what to look for.
What Is the Difference Between a Business Broker and a Financial Advisor for Exit Planning?
A business broker facilitates the transaction itself, helping to identify buyers, market the business, and negotiate deal terms. A financial advisor focused on exit planning addresses the personal financial dimensions of the sale: how the proceeds will be taxed, how they will be invested, whether the sale price is sufficient for long-term financial independence, and how the owner's financial strategy will evolve after the business is sold. These roles are complementary, not interchangeable. A business owner approaching an exit benefits from having both working in coordination.
Will I Have Enough Money After Selling My Business?
This is the central question in any exit planning engagement, and the answer depends on a careful analysis of your expected sale proceeds after tax, your projected living expenses, your existing assets and income sources, and the duration your plan needs to sustain. It is a question that should be answered with a detailed financial model, not intuition. We encourage business owners to treat this question as the starting point of the planning process rather than something to evaluate after a transaction closes. Learn more about how we approach this through our financial independence planning framework.
Stay Connected
Continue Learning Before You Decide
Exit planning is a multi-year process and the more informed you are going in, the better positioned you will be. Follow New Horizons Boutique Financial Services across our channels for ongoing financial education, firm updates, and planning insights relevant to business owners navigating major financial transitions.
Watch on YouTube
Financial education videos covering retirement strategy, tax planning, and wealth management topics relevant to business owners and professionals planning their next chapter.
View ChannelConnect on LinkedIn
Professional insights, firm updates, and financial planning perspectives shared for business owners and executives thinking through their long-term financial strategy.
View ProfileFollow on Facebook
Community updates, financial planning announcements, and firm news for those following New Horizons Boutique Financial Services and its work with clients across Minnesota.
Follow UsStart Your Exit Planning Conversation
Whether your exit is three years away or closer than you expected, the right time to build a strategy is before the transaction is in motion. Our Lake Elmo team works with Minnesota business owners throughout the Twin Cities metro to develop comprehensive, strategy-first exit plans tailored to their specific business, timeline, and financial goals.
No templates. No generic recommendations. A first conversation with no obligation.
Contact Us