Selling Your Business in Washington State: What to Do Before, During, and After
Thirty years of navigating business transitions in the Pacific Northwest has taught me one thing: the deals that go well aren't always the ones with the best valuations. They're the ones where the seller's financial picture was coordinated long before the listing.
A few years ago, a business owner called me after his sale had closed. The company sold at a number he was pleased with — the valuation was fair, the buyer was legitimate, and we closed the deal. But he was not happy.
His CPA hadn't been engaged until week eight of due diligence, when the buyer's attorney surfaced a liability that could have been resolved six months earlier. His estate hadn't been updated since his youngest child was born — and the sale proceeds had just made his estate significantly more complex. And the morning the wire arrived; he had no plan for what to do with the money.
The sale was fine. The preparation wasn't. And that gap — between the deal and the planning — cost him real money and real peace of mind.
I've seen variations of this story more times than I'd like. The pattern is almost always the same: the owner spent 30 years building the business, and six months selling it. The preparation that should have started two or three years before the transaction started the week of the listing.
"The best exits I've seen weren't the ones with the best valuations. They were the ones where the seller came to the table completely prepared."
Before: What the Preparation Should Look Like
The ideal window to start serious exit preparation is 24 to 36 months before you plan to sell. That's not because the process takes that long — a typical transaction in Washington State runs 6 to 12 months from listing to close. It's because the decisions that actually move the needle on value and tax outcome need time to work.
Here is what I tell business owners who are two to three years out:
Get your CPA involved now, not at closing.
Tax treatment of sale proceeds — asset sale versus stock sale, installment arrangements, earnout structure — can mean a significant difference in what you actually walk away with. Your CPA needs to be part of the transaction strategy from the beginning, not brought in to explain a done deal.
Update your estate plan before the proceeds arrive.
Washington State's estate tax exemption is $3 million. For many business owners, a successful sale will push the estate meaningfully above that threshold. Trusts, gifting strategies, and charitable vehicles that could have reduced the estate tax exposure require time to implement — ideally, months or years before the transaction closes. Done the day after the wire, the opportunity is largely gone.
Find and clean up your liabilities.
Buyers conduct due diligence. Their attorneys will find what you haven't addressed: unresolved contracts, informal employee arrangements, equipment leases with adverse assignment clauses, environmental issues, deferred maintenance. Every one of those findings is either a price reduction, an escrow holdback, or a deal-killer. Identifying them on your own schedule — and resolving them before the process begins — is worth far more than what it costs to fix them.
Know what the business is worth — and what it's worth to you.
A formal valuation, updated annually in the years before a sale, does three things: it gives you a realistic number to plan around, it surfaces the drivers of value that buyers will actually pay for, and it removes the psychological shock of hearing a number that doesn't match your expectation. Sellers who have never had the business valued tend to negotiate from emotion. Sellers who have been tracking value for three years negotiate from data.
Decide what you'll do with the money before you have it.
The question I get most often from business owners isn't "what is my business worth." It's "what do I do with the money?" And it's a harder question than it sounds. A business sale can reshape a family's financial picture in ways that take years to fully navigate: investment strategy, real estate decisions, charitable giving, family considerations, WA estate tax. The time to build that framework is before the proceeds arrive — not in the 90 days after, when you're exhausted and every bank in town wants a meeting.
During: How to Protect the Process
Once you're in a transaction, the pace accelerates in ways that surprise most sellers. Due diligence typically runs 30 to 90 days after the letter of intent, and the pressure to respond quickly to buyer requests can make it easy to lose perspective.
A few things that matter during the transaction:
Keep your advisory team informed in real time. Your CPA, attorney, and wealth advisor need to know about buyer proposals, structure changes, and timeline shifts as they happen — not after the fact.
Don't make large financial decisions mid-transaction. This is not the moment to sell the vacation property, execute a large gift to family members, or restructure the investment portfolio. Wait until the deal is done.
Understand the structure before you sign. An asset sale and a stock sale have very different tax implications. An earnout that looks attractive on paper can be difficult to collect. Escrow holdbacks are real money held in reserve — make sure you know what conditions apply.
Protect confidentiality. Employees, customers, and suppliers who learn the business is for sale before the deal is done can create real problems. Control who knows what, and when.
After: The First 90 Days
The wire has arrived. The business you built for three decades is someone else's. And your financial picture has just changed in ways that require deliberate decisions.
Here is what the first 90 days after a business sale should look like:
Park the proceeds somewhere safe while you think.
Short-term, low-risk, liquid. A money market account or short-term Treasuries. This is not the moment to deploy capital into a new investment. Give yourself 60 to 90 days before making any commitments with the proceeds.
Run the tax calculation before you do anything else.
Federal capital gains, state income tax, WA estate tax implications — your CPA should produce a clear picture of what you actually netted, after taxes, within the first few weeks of closing. Every planning decision flows from that number.
Review the estate picture.
If your estate plan wasn't updated before the sale, it needs to be reviewed immediately after. Washington's estate tax is assessed on the gross estate — the proceeds you just received are part of that calculation. Your estate attorney and wealth advisor need to be coordinating now.
Build an investment strategy for the next chapter.
Most business owners have had the majority of their net worth concentrated in a single illiquid asset for decades. Now you have liquidity. The investment strategy for that capital should reflect where you are: your income needs, your risk tolerance, your time horizon, your estate goals. This deserves a thoughtful, unhurried process — not a portfolio assembled at the first meeting with the first advisor who calls.
Think about real estate.
Many business owners who sell also own the real estate the business operated from, or have other investment properties. The sale may affect what you want to do with those assets. Real estate decisions — 1031 exchanges, sales, restructuring — have their own timelines and tax implications. This is worth addressing explicitly in the post-transaction planning.
The Bottom Line
A business sale is the most significant financial event in most owners' lives. The outcome is largely determined before the listing — by how well the financial picture has been prepared, coordinated, and positioned. If you are a business owner in the Pacific Northwest and you are thinking about what comes next, the best time to start the conversation is now. Not when you've decided to sell. Now.
Ready to start the conversation?
PAM works with business owners throughout the Pacific Northwest on exit planning, financial coordination, and post-transaction strategy. Contact me at mike@privateasset.com or visit privateasset.com/connect.