It is absolutely essential that at least one of the members of your team be an expert in dealing with the tax aspects of business sales and acquisitions. This person may be your accountant, your lawyer, or even your mergers and acquisitions consultant. You may also decide to hire a specialist solely for this purpose, most likely a lawyer associated with or recommended by the lawyer who is handling your sale.

The role of business appraiser or valuation expert is an example of a job that might be filled by your accountant, by your mergers and acquisitions consultant, or by a specialist (usually a CPA) you hire for this purpose.

If you're thinking of selling your business, it's likely that your accountant will be one of the first people you turn to for advice. If you've used an accountant regularly to prepare your tax returns and draw up financial statements, he or she will be very well acquainted with the financial shape of your business. Most probably, your accountant also has other clients in similar businesses and can tell you how you compare to them. So, your accountant will be in a good position to know whether your business would be attractive to a potential buyer, and can give you some good ideas on how to make it more attractive.

Along with your accountant, your lawyer needs to play a key role in your plans to sell your business, and in drawing up the legal documents that will carry out those plans.

You don't need to list your business with a business broker or agent in order to sell it. You may already have a good idea as to who the likely purchaser of your company would be — perhaps a key employee or a relative — in which case the marketing power of a broker won't be necessary. You may have gotten unsolicited offers to purchase your business. Or, you might decide to place ads yourself in the business opportunities sections of several newspapers or trade publications, to see if you can find a buyer without having to pay a broker's commission.

When's the best time to sell your business?

At the outset, it's important for you to sit down and do some serious thinking about what, exactly, you want from the sale.

Even if you've been a determined do-it-yourselfer from day one, selling your business is not a job you should attempt to do alone. Even for a relatively small business, there's a myriad of federal, state, and local regulations and tax issues to consider, not to mention one or more extremely important contracts to negotiate. Selling your business is something you'll probably do only once — there's no opportunity to take a trial run or build up any experience before you do the real thing.

If your business has been a success, you've probably had to pour most of your time, energy, and money into it for what may seem like forever. You may see your company as an extension of yourself, and it may be hard to even imagine life without it. In some cases your entire family may have depended on the business, discussed it endlessly around the dinner table, used it as an education and a proving ground for the children, and practically made it into another family member!

Many times where an operating business has been transferred down to the next generation, sold outright, or recapitalized, the family finds it useful to set up a family office for the administration and management of their remaining collective assets.

Before you actually begin the process of selling your business, there are a number of issues you should consider:

Where a private annuity is used as a business succession tool, the owner sells (transfers) his business to a family member in exchange for a lifetime income.

Recapitalization, or the issuance of two classes of corporate stock, is another method used to transfer ownership at minimal tax cost. Stock is generally divided into voting and non-voting categories which permits control to remain with one individual or group, usually the family members who are active in the business. The non-voting stock is used to give provide equity to the inactive family members. There are stringent laws limiting recapitalizations and, again, expert legal advice is necessary.

Strategies for acquiring the liquidity needed for the payment of estate taxes can be handled three ways:

Grantor retained annuity trusts (GRATS) are a complex method of transferring assets to the next generation with minimal gift or estate taxation. The are actually fixed annuities for a fixed number of years. Their complexity requires expert legal advice.

Transition of the control of a family business can take place over a period of months or even years, depending on the needs and wishes of the family members and the business itself.

Training, on the job and otherwise, is the critical ingredient that can put success into a family business succession plan. It can take many forms.

You can't take it with you, or so they say. Well, if you can't take it along, at least you can decide who gets it and when. Accomplishing this without horrendous tax consequences is a complicated challenge, but it can be done. Passing it along after you're gone is a minefield of tax traps but there are ways your lawyer can navigate through it.

Personal and career goals need to be outlined by the successor generation. Will the successor be given the opportunity, the capital, the authority as well as the responsibility necessary to achieve success in and for the business as well as adequate compensation to support family needs during the "dues paying" period of the transition?"

Retirement goals must be defined by the first generation (that of the business's founder) and communicated to the successor, so that conflicts may be ironed out in advance and misunderstandings don't arise down the road.

Different agendas which can so often gum up the works of a succession plan can be avoided by communicating expectations in advance.

A family business is to business what military music is to music!-Anonymous

Conflict between the founder of a family business and his or her successor is a matter of degree. It's normal for some intergenerational conflict to exist.

Selecting a successor is often a decision by default. Most family businesses will have one member of the next generation who is more active, qualified, and interested in the business than his or her siblings. Frequently, the founder has already likely spent a great deal of time grooming the successor-apparent or the successor has soaked up much of the necessary knowledge on his or her own over the years. The challenges in this scenario come in the form of finding ways to assure equitable treatment for the non-participating family members, be they spouse or siblings.

If you've been at all successful in your business, you've most likely put tremendous amounts of time, energy, and plain old hard work into it. It's probably one of your proudest achievements.