A 24-month walkthrough of selling a $5M services business using 11 tools from the Baratelli Institute library — from first thoughts of exit through Year 1 post-liquidity. The tools are not a pile. They're an integrated curriculum.
You are the founder of a $5M revenue services business in California, profitable at 25% EBITDA margin, with $1.25M EBITDA. You're 58 years old, ready to think about an exit in 18-24 months. You'd net the most by selling, but you don't know how to start, what your business is worth, what taxes you'll pay, or what to do with the money once it's yours. The library walks you through it.
Before you do anything else, anchor on a defensible valuation range. Skip this and you spend the next 18 months either anchored too low (selling under value) or too high (failing to find buyers). The Deal Multiples tool gives you the EV/EBITDA range for your industry and size, drives the bear / base / bull scenarios, and identifies the value drivers you should improve before listing.
Multiples tell you what comparable businesses sold for. DCF tells you what the cash flows are intrinsically worth. If the two answers diverge by more than 25%, something is off — either your inputs or the comp set. The DCF Sanity Check runs a 5-year explicit forecast plus terminal value with sensitivity tornado on the 5 most-leveraged inputs (WACC, terminal growth, margin, growth, capex).
DCF needs a discount rate. Stock buyback decisions need one. CapEx decisions need one. NOL valuations need one. Most founders pick a round number ("we use 10%") and never re-examine it. The WACC Calculator computes a defensible cost of capital using CAPM (risk-free + beta × ERP + size premium + country premium) and after-tax cost of debt. One number, used everywhere.
You're in California. A $10M deal with a $9M gain at 9.3% state rate = $837K of California tax — entirely avoidable if you establish residency in Florida BEFORE the sale closes. Residency change requires 12-18 months of bona fide domicile transfer (physical presence, voter registration, drivers license, primary home sale, etc.). California aggressively audits former residents on large liquidity events. Start now or accept the bill.
If your business is a C-corp held 5+ years and meets the §1202 active-business test, the first $15M of gain (post-OBBBA permanent) is FEDERAL TAX FREE. On a $9M gain, that saves $1.8M in federal LTCG. Most C-corp founders don't realize they qualify. The QSBS Calculator runs the 6-test eligibility check, the holding-period analysis, and the per-issuer cap math.
Buyer wants asset sale (basis step-up = present value of future depreciation deductions). Seller (you) wants stock sale (single layer of capital gain instead of double-tax + ordinary recapture). The §338(h)(10) election bridges the gap for S-corps. The Asset vs. Stock Sale tool computes the buyer's step-up benefit, your tax cost under each structure, and the gross-up the buyer should pay you to make you whole.
Most LOIs say "delivered with normalized working capital." That phrase is a $200K-2M negotiation in disguise. The peg is the trailing-12 average WC you commit to deliver at close — any shortfall is dollar-for-dollar off the purchase price. Most sellers don't think about this until the closing-day surprise. The Working Capital Peg tool sets your peg with normalizations, seasonality adjustment, and the closing-month exposure analysis.
Your buyer (Sarah, a 45-year-old industry executive) is using SBA 7(a) for $1.8M of the $10M deal, plus $500K seller note (full standby), plus $400K cash equity. The SBA Financing tool runs Sarah's underwriting through the bank's lens — DSCR, global DSCR, equity injection, collateral. If you understand what the bank is looking at, you can structure the deal so it CLEARS the underwriting. Deals fail at this stage more than at any other.
Closing day is exhilarating and terrifying. The single biggest mistake post-liquidity founders make: leaving the entire proceeds in cash for "a little while." The cash drag, the temptation to chase yield, the unfocused planning — all kill returns. The Concentrated Stock Diversification tool walks through the 6 strategies for moving from one big chunk into a properly-diversified portfolio over the right time horizon, with the right tax efficiency.
Pre-sale, your business income put you in 32-37% federal. Post-sale, you have no W-2, modest investment income, and you haven't yet started Social Security. You're in the 12-22% federal bracket — the cheapest bracket window of your life. Convert your $800K Traditional IRA to Roth NOW, while it's cheap. The Roth Conversion Stairstep maps the multi-year plan that fills the right bracket each year up to age 73 RMDs.
Pre-sale, you had a $5M business and a $1.2M home and were nowhere near the federal estate exemption. Post-sale, you have $9M+ in liquid assets, you'll appreciate at 6-7% annually, and in 25 years (at age 83) your estate will easily exceed $25M. The exemption is $15M individual / $30M MFJ post-OBBBA, with a 40% rate above. Estate planning becomes urgent. The Estate Tax Headroom tool runs the math; the Trust Selector picks the structure.
The Sale Journey shows the seller side. The Buyer Journey shows the same arc from the other side of the table. Together they cover both halves of every M&A transaction.