Selling a Family Business in Lancaster or Chester County: What to Think About Before You Sign the Letter of Intent

By Educational Content

You have spent years, maybe decades, building something that matters. Your business is not just an income source. It is your reputation, often a meaningful part of your identity. In many cases, it is the primary financial asset your family owns. Now, a serious buyer is at the table.

Before you sign a letter of intent to sell a family business in Lancaster or Chester County, there are conversations you need to have, decisions that need to be sequenced correctly, and planning that should happen well before the deal closes. Most of it has nothing to do with negotiation tactics. Most of it has everything to do with stewardship.

Key takeaways: Ideally, planning for a business sale begins years before a serious offer ever arrives. However, if an opportunity presents itself unexpectedly, the period between a serious offer and a signed LOI can still be one of the most important planning windows available to business owners. Tax timing considerations, charitable planning, family alignment, and liquidity planning all carry significantly more weight before closing than after. This article walks through the decisions that matter most, in the order they matter most.

The Planning Window Many Business Owners Overlook 

Here is what often happens when a buyer makes a serious offer on a family business.

The business owner is excited. The number is meaningful. Attorneys get involved. The process accelerates. And before long, the LOI is signed, and the due diligence clock is ticking.

What often gets skipped in that excitement is the planning window that existed between the offer and the signature. That window is where some of the most consequential decisions of your financial life could have been made. Once the LOI is signed and the deal structure is set, many of those options narrow significantly or close entirely.

Understanding what to do in that window is the point of this article.

Why Sequence Matters More Than Speed

Selling a family business is not a single event. It is a sequence of decisions, and the order in which you make them matters enormously.

The instinct for many business owners is to focus on the deal itself: the purchase price, the terms, the transition period. Those things matter. But the planning that sits alongside the deal, including tax considerations, charitable intentions, family dynamics, and liquidity needs, is often where comprehensive holistic financial planning becomes most valuable, helping determine how much of what you worked for actually serves the purposes you care about.

Getting the sequence wrong does not mean the deal falls apart. It means you arrive on the other side of closing with a lump of liquidity and a set of questions you wished you had answered earlier.

Getting the sequence right means you have a higher likelihood of closing with clarity. You know what the proceeds are for. You know how your family is positioned. You know what you are giving and why. And your financial plan reflects the values you have built your life around.

Tax Timing: The Conversation to Have Before the LOI

Tax considerations around a business sale are among the most complex in personal finance. They are also among the most time-sensitive.

The structure of the deal, whether it is an asset sale or a stock sale, whether payments are spread over time or received at closing, and how the proceeds are categorized all carry significant potential tax implications. Some of those structural decisions may be negotiable early in the process. After the LOI is signed, they often are not.

A few considerations worth discussing with your advisory team before you sign:

• Deal structure: Asset sales and stock sales are treated differently from a tax perspective, and the implications vary meaningfully depending on your business type and basis.
  
  
• Installment arrangements: Receiving proceeds over time rather than in a lump sum is one approach some sellers explore for its potential tax implications. It also introduces a risk that deserves careful evaluation.
  
  
• Timing of the closing year: The tax year in which a sale closes matters. In some situations, timing a closing before or after a calendar year-end may be worth discussing with your CPA and advisor as part of a coordinated planning process.

None of this is advice. These are categories of conversation to have with your qualified tax and legal professionals early, not after the LOI is executed.

According to the Exit Planning Institute, only 20-30 percent of businesses that go to market actually close. (Source: Exit Planning Institute) But for those who do, the owners who are most prepared tend to have started the planning conversation well before the buyer appeared.

Charitable Planning Before the Sale Closes

If generosity is part of your values, and for many Lancaster and Chester County business owners, it is, a business sale represents one of the most significant giving opportunities of your lifetime. Certain charitable planning opportunities may be more effective or more readily available before closing than afterward 

Before a business sale closes, it may be possible to contribute a portion of business interests directly to a donor-advised fund or similar giving vehicle. Once those assets are in a charitable fund, they may be positioned to make a meaningful gift to the causes you care about, with potential tax considerations to evaluate carefully with your advisors.

The National Christian Foundation offers giving solutions specifically designed for complex assets, such as business interests, including its Complex Gift Fund, which may accept ownership stakes in a business before a sale is finalized. (Source: National Christian Foundation, Essential Guide to NCF Giving Solutions)

For business owners who want their sale to fund their giving vision, not just their retirement, this is a planning area worth exploring well before signing the letter of intent.

Ask yourself this before you proceed: If this sale is the largest financial event of your life, does your giving reflect that? Does it reflect what you actually believe?

Liquidity Planning: What Do You Do With the Proceeds?

Many business owners have most of their net worth tied up in their businesses. The sale converts an illiquid asset into liquid capital, often for the first time at this scale.

That transition is significant. And it requires a plan.

A few questions worth working through before closing:

• What do you actually need to live on? If the business was your primary source of income, you now need a replacement income strategy. How much of the proceeds should be allocated to support your lifestyle, and over what time horizon?
  
  
• What are your goals for the rest? Retirement funding, charitable giving, family support, reinvestment, or some combination? Each goal may call for a different approach to holding, investing, and deploying proceeds over time.
  
  
• How does your investment approach change? Running a business and managing a liquid portfolio are very different things. Many owners discover that professional wealth and investment management becomes increasingly important after a major liquidity event, when proceeds must be aligned with long-term goals, stewardship priorities, and family objectives. The investment strategy that helped build the business may not be the same approach needed to steward the proceeds for decades to come.

At Bare Wealth Advisors, we work with families navigating major financial transitions,, including those with investable assets across a wide range, as well as high-net-worth families managing complex situations that require deep coordination across legal, tax, and financial disciplines. Business sales often involve complex financial, tax, legal, and family considerations that may benefit from coordinated planning. 

The Family Conversation That Cannot Wait

For many business-owning families in Lancaster and Chester County, the sale of the business is also a generational moment. It is the point at which wealth that was tied up and illiquid becomes transferable. And that raises questions that go far beyond the deal itself.

• Have you talked with your children about what is coming?
• Do they understand your values around money and generosity?
• Is there a family member who expected to inherit the business rather than see it sold?
• How do you want to use a portion of the proceeds to bless the next generation without undermining their own work ethic and sense of purpose?

These conversations are not comfortable. They are also not optional, at least not if you want the sale to strengthen your family rather than quietly fracture it.

Wisdom before wealth. That is a value worth building into the process from the beginning.

A Simple Framework for What to Do Before You Sign

Whether you are actively planning for a sale years in advance or responding to an unexpected offer, this framework can help guide the conversations and decisions that matter most.

Step 1: Assemble your advisory team and get them talking to each other. Your CPA, your attorney, and your financial advisor need to be coordinated, not siloed. The decisions they each touch are interconnected, and gaps between them are where opportunities get missed.

Step 2: Work through your post-sale financial picture. Before you negotiate deal terms, know what the proceeds need to do for you. Income replacement, liquidity needs, charitable intentions, and family goals all shape how you evaluate the deal structure itself.

Step 3: Have the family conversations before the deal closes. A business sale is a valuable moment, not just a financial one. Use it intentionally. Share your reasoning. Invite your family into the vision. Pass along the wisdom before you pass along the wealth.

What Happens If You Wait Too Long

The cost of moving too quickly is real.

Charitable giving strategies that could have been explored before the sale may not be available after it. Tax considerations that could have informed the deal structure may be moot once the LOI is signed. Family conversations that needed to happen before the announcement may become reactive and painful afterward.

You do not get a second chance at the pre-LOI planning window. Once the deal closes, you work with what you have.

Many families find that taking time for thoughtful planning before signing a letter of intent helps them approach the transition with greater clarity and confidence .

That is the kind of sale worth working toward.

Take the First Step Before It Is Too Late

If a business sale may be in your future, whether in the next several years or already taking shape, now is the time to begin planning.

At Bare Wealth Advisors, we serve families in Lancaster and Chester counties and surrounding areas who are navigating major financial transitions. We understand that a business sale is not just a transaction. It is a stewardship moment.

Schedule a complimentary discovery meeting. Visit barewealthadvisors.com or call 717-407-5200. Bring your questions.  We will work alongside your existing advisory team to help evaluate the planning considerations involved.

Frequently Asked Questions