One classic mistake potential sellers of a business make is thinking in terms of their topline number.

More precisely: when they ask themselves the question “what’s your number?”, potential sellers tend to think of their gross number. And unless you get your money in gold coins in one of those pirate treasure chests, that’s the wrong number to focus on.

The real number, of course – the one they should focus on – is their sale price net of applicable taxes. And pro-actively incorporating adequate tax planning way before an exit can make all the difference in that number, and how quickly you can achieve it.

Einstein once wrote “the tax code is too difficult for a mathematician. It takes a philosopher.” What he meant was that apparent rules and exceptions seem subject to so many wrinkles and nuances that one cannot expect to simply understand it “objectively”. As Dan Geltrude – named “America’s Accountant” by major news organizations – so brilliantly put it, this is because the tax code is a preferred instrument of public policy by government, where policies of current administrations are layered on top of policies from former administrations – going back decades. You do, in fact, need a philosopher to unpack it all.

Luckily for Fit to Exit and our students, Geltrude is just such a tax philosopher. The way Dan elucidates the trickiest aspects of tax law is truly remarkable. I left this interview with many fundamental tax questions I’ve had for years cleared up for good. One thing that clearly emerges from this is that business owners need to be very strategic in selecting their corporate vehicle years in advance of an exit transaction. The consequences are so significant, no one should ignore them. Being tax efficient can make a difference of months or even years in how quickly you achieve your ideal net payout. Because that’s the number that matters.

Warmly, and to your exit!

Fred