Getting Ready to Be Sellable.

A well-run operator at this level can reasonably expect a 3–5x EBITDA multiple. Whether you net $1.5M or $4M from the same transaction depends almost entirely on decisions made in the 24–36 months before closing.

Private equity has been aggressively consolidating home services for years. If you are running a clean, growing business, you will have buyers. The question is whether your financial life is structured to take full advantage — or whether you hand a third of it back in taxes you didn't have to pay.

Playbook — $2M–$5M

01 - Get a business valuation now: Not to sell — to understand your gap. Where are buyers going to compress your multiple? What does your EBITDA actually look like when normalized? You need to know this before anyone else does.

02 - Clean up the financials: Work with your CPA to normalize owner compensation, pull personal expenses off the P&L, and document every legitimate add-back. Every dollar of verified add-back is worth 3–5x at a typical multiple. This is the highest-ROI work you can do before listing.

03 - Review your entity structure: If you haven't already made an S-Corporation election, talk to your CPA immediately. Depending on your transaction structure, this decision alone can mean six figures in tax savings at close.

04 - Model an installment sale: Spreading your gain recognition across multiple tax years keeps you in lower effective rate brackets. This strategy is only available if structured before — not after — the transaction closes.

05 - Maximize retirement contributions now: A SEP-IRA or defined benefit plan in the 2–3 years before your sale can shelter $100,000–$300,000 annually in pre-tax income. The tax savings compound directly against what would have been ordinary income.

06 - Start a direct indexing strategy: Instead of a broad ETF, hold individual underlying stocks and harvest tax losses throughout the year. Two to three years of this creates a meaningful offset against the capital gain at close. This is the move most advisors at this level have never offered.

07 - Establish a Donor-Advised Fund before the sale: If you are charitably inclined at all, donating appreciated assets — or even a small pre-sale equity interest — before closing eliminates that gain entirely while generating an immediate deduction. Doing it from cash after closing is a fraction as efficient.

08 - Build your exit team early: You need a financial advisor who models the full after-tax picture, a transaction CPA, an M&A attorney, and a broker who knows home services. Assemble them now — not after you have signed an LOI.

Private Equity Is Watching. Plan Accordingly.

At this scale, lower-middle-market PE firms and strategic roll-ups are active buyers. The deal structures they propose — rollover equity, earnouts, management carve-outs — create a level of planning complexity that demands coordination your CPA alone cannot provide.

The home services consolidation wave is real and accelerating. PE firms have built sophisticated acquisition playbooks for exactly your business. You need an equally sophisticated financial plan to meet them at the table — and to know which terms to accept, which to push back on, and which are designed to benefit them at your expense.

Understanding the PE Playbook

01 - Know what rollover equity actually means: PE firms will typically ask you to roll 20–30% of your proceeds back into the new entity. This isn't just a negotiating tactic — it's how they align incentives. But rollover equity has complex tax treatment, limited liquidity, and real risk if the platform underperforms. Model it thoroughly before accepting.

02 - Pressure-test every earnout before signing: Earnouts sound like upside. They're often contingent income that gets recognized as ordinary income in future years — potentially in years where you already have elevated tax liability from base proceeds. Model each scenario with your tax advisor before the LOI is executed.

03 - Run a state domicile analysis: For NJ, NY, CA residents, the difference between your current domicile and established Florida residency before a close of this magnitude can be a seven-figure decision. This requires real, legitimate establishment — not a P.O. box — and enough time before the transaction.

04 - Review your buy-sell agreement now: Particularly if you have business partners or co-owners. An outdated or poorly drafted buy-sell agreement can trigger unintended taxable events at closing — or worse, a dispute over deal allocation that derails the transaction.

Estate & Trust Strategies Before You Close

01 - Grantor Retained Annuity Trust (GRAT): Fund a GRAT with business equity 2–3 years before close. If the business appreciates as expected, all of that appreciation transfers to your heirs with zero gift tax. This is one of the most powerful pre-liquidity estate planning tools available — and it requires a head start.

02 - Irrevocable Life Insurance Trust (ILIT): If your post-close net worth will approach or exceed the federal estate tax exemption ($13.99M per person in 2025), an ILIT keeps life insurance death benefits outside your taxable estate. Set it up before the transaction closes and fund it appropriately.

03

Charitable Remainder Trust (CRT): If you have meaningful charitable intent, a CRT lets you contribute appreciated equity before the sale, receive a stream of income for life, take an immediate deduction, and ultimately benefit your chosen charities — while eliminating capital gains on the donated portion.

04 - Direct indexing — start now: 2–3 years of systematic tax loss harvesting through a direct indexing strategy builds a meaningful offset against your transaction gain. This is not a last-minute move. It requires time to generate losses of material size.

Post-Close: Where Most People Lose Ground

01 - Design your investment plan before the wire hits: Liquidity without a plan leads to poor deployment, emotional decisions, and sub-optimal returns in the early years — exactly when compounding matters most. Your investment policy statement should be drafted and agreed upon before closing.

02 - Access private markets: At this wealth level, institutional-grade private equity, private credit, and real asset allocations are both appropriate and accessible. These strategies provide return enhancement and diversification unavailable through public-markets-only portfolios — and they require a qualified advisor relationship to access properly.

A Generational Wealth Event.

At this scale, a well-run operator trading at a competitive multiple may generate $20M–$60M or more in gross transaction value. The planning decisions you make now will determine how much of that actually flows to you and your family — and how much disappears in federal and state taxes.

The sophistication of your financial and estate planning should match the magnitude of the moment. This isn't a transaction you model with a spreadsheet and a CPA who does annual returns. It requires integrated planning across tax, estate, investment, and legal — all coordinated around a single event that will define your family's financial trajectory for generations.

The Transaction: Get This Right First

01 - Hire an investment banker — not a business broker: At $10M+ in revenue, you need a banker with demonstrated home services M&A experience who will run a full competitive process. The difference in purchase price from a competitive process versus a bilateral negotiation routinely exceeds the banker's fee by a multiple of 5–10x. This is not where you optimize for cost.

02 - Model multi-year income spreading: Certain deal structures allow for income deferral across tax years. An installment sale or structured earnout, modeled carefully in advance, can keep a significant portion of your gain in lower effective rate environments. This requires your tax counsel and financial advisor working together before the LOI.

03 - Run a full state domicile review: At transaction values of $20M+, the difference between NJ/NY residency and established Florida domicile can exceed $2M in state tax alone. This requires legitimate establishment well in advance — not a rushed move in the weeks before closing that won't hold up to scrutiny.

Advanced Estate Planning — Start 3 Years Out

01 - Intentionally Defective Grantor Trust (IDGT): Fund an IDGT with business equity at least 2–3 years before close. An IDGT freezes the taxable value of the transferred interest — all future appreciation passes to your heirs outside your estate entirely. You pay the income tax on trust earnings personally, which is itself an additional tax-free transfer. One of the most powerful tools available at this wealth level.

02 - Spousal Lifetime Access Trust (SLAT): Move significant assets outside your taxable estate while retaining indirect access through your spouse. Particularly effective now, while the federal lifetime exemption remains at elevated levels ($13.99M per person). If the exemption sunsets post-2025 back toward $7M, the window to use the full current exemption will have closed.

03 - Model your estate tax exposure today: A $30M+ estate at a reduced exemption faces a real, calculable liability. Run this analysis now — not after the wire — and implement structures while you still have time and available exemption to deploy. This is a planning decision, not a planning conversation.

04 - Charitable Lead Annuity Trust (CLAT): If legacy giving matters to your family, a CLAT directs income to charity for a defined term, then passes the remaining assets to your heirs — typically with a substantially reduced gift tax cost depending on market conditions at funding. Philanthropy and estate planning are not separate conversations at this wealth level.

05 - Donor-Advised Fund or Private Foundation: Establish a significant DAF or explore a private family foundation as part of your legacy architecture. Contributing equity before the sale — rather than donating cash after — eliminates the capital gain while generating a full fair-market-value deduction. The tax efficiency difference is dramatic.

After the Wire: Where It Can Still Go Wrong

01 - Impose a 90-day decision moratorium: No major financial commitments for 90 days after closing. Park proceeds in short-duration Treasuries or a money market fund while your advisory team assembles a comprehensive investment policy statement. The urgency you feel to deploy capital is an emotional response — not a financial imperative.

02 - Define your sufficiency threshold: What is the invested capital required to sustain your desired lifestyle indefinitely from returns alone, without touching principal? This figure — your personal "enough" number — becomes the foundation of every investment decision that follows. Build the plan around it.

03 - Build a private markets allocation: Institutional private equity, private credit strategies, and real asset allocations are appropriate, accessible, and historically additive to long-term risk-adjusted returns at this wealth level. These require a qualified advisor relationship and proper manager selection — they cannot be accessed through a retail brokerage account.

04 - Plan the emotional transition intentionally: Many operators who built a business over 20–30 years experience a profound sense of loss in the months following a sale. It feels less exciting than expected. The purpose and identity that came with the business disappears overnight. Having a clear vision for what comes next — a new venture, board work, philanthropy, family — is as important as the financial plan itself.