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How To Prepare For The Sale of A Business: My Personal Experience Selling Quick & Reilly

By Leslie C. Quick III

The above photo was taken the day Quick & Reilly went public on the NYSE in June 1983. Pictured is the Quick family alongside Quick & Reilly executives. 

Are you considering selling your business in the near future? It can be exciting to think about the possibilities, but selling a business can greatly impact your family, colleagues, and personal life. It’s imperative to understand how the right professionals, like attorneys and advisors, can help you streamline the sale and enhance your proceeds. It’s also important to put a financial plan in place for the proceeds, considering what your life will look like after the sale.

My father started a discount stock brokerage firm in 1974, Quick & Reilly, which was acquired by Fleet Bank in 1998. His mission was to offer a fair deal to retail investors who were being charged a premium at the existing brokerage firms on Wall Street. I joined the firm as the fourth employee in 1975 after graduating from Saint Bonaventure University. I went from doing grunt work as a recent graduate to becoming a key member of the team responsible for expanding the firm’s network around the country – which eventually expanded to around 120 offices nationwide and over 1,100 employees.

Knowing When to Sell 

In 1988 potential buyers started making inquiries about our firm, which eventually led to a few serious offers. At the time we didn’t think the offers were strong enough and decided to hold off. Years later a number of our competitors were bought out for significantly higher prices, so the topic of selling the business was put back on the table. As a friend of mine said to me at the time, “when the numbers get stupid, you’ll know it is time to sell.” My advice to entrepreneurs today is to pay attention to what’s happening in your marketplace and listen to your gut. If you do these two things, you’ll know when the time is right. But knowing when the timing is right, and finding the right buyer are two different things. That’s why it’s important to surround yourself with the right professionals. 

Work With The Right Team

After being approached by several buyers we worked with an investment banker to negotiate the best deal. We also hired a good M&A attorney, which was a big investment but worth it in the end. There are many regulations to be aware of and documents to draft (such as the letter of intent) and we needed his guidance. The process can be daunting, which is why working with a team of well-versed professionals, including a competent investment banker, CPA, and Mergers & Acquisitions (M&A) attorney, is vital. For instance, your CPA’s ability to draw up accurate financial statements impacts the investment banker’s valuation, which is then used by the M&A attorney. Each has a different skill set which will help you navigate the tax and legal implications of the deal. 

Family And The Sale

There is nothing certain in life but death and taxes, so it’s crucial to be mindful of the taxable income generated by the sale of your business. Income taxes and estate taxes were a significant consideration as I explored strategies to build an estate plan for my family. I took advantage of the wealth transfer tools available to me at the time like wills, irrevocable/revocable trusts to transfer assets in a tax efficient manner. We also ensured that the proceeds would be passed down responsibly so that our children would be motivated to lead productive lives. Not everyone knows this, but many trusts have clauses that only allow for reasonable distributions (HEMS health, education, maintenance, and support). In addition to wealth transfer, we wanted to positively impact the greater community, which included using tools like charitable trusts, donor advised funds, and family foundations to donate assets to qualified charities.

Consider working with a qualified investment advisor who is a CERTIFIED FINANCIAL PLANNER™ professional who works for you on a fiduciary basis. This person won’t be primarily compensated by selling financial products like mutual funds or annuities and can help you establish a plan for your newly obtained windfall. Working with this type of advisor will help you invest your proceeds in a tax-efficient manner. That way, you can continue to grow your assets and provide for yourself, your family, and the causes you care about.

How Your Personal Life Changes

Once Quick and Reilly was sold, I signed a five-year deal to stay with the firm until March of 2003 when I officially ‘retired.’ My advice to entrepreneurs is to think ahead about whether or not you want to stay on or work with your company in a consulting capacity as you prepare for its sale. It can be difficult to go from 100 mph to 0 mph for some people. In fact many retirees without any mental stimulation can feel depressed after retirement. I think it would be wise for business owners to take some time off after the sale to consider what they want to do next, but not to wait so long that they become idle. Before founding the firm in 2004, I dedicated much of my time to raising money for charity and helping organizations in a non-monetary capacity.

The Bottom Line

Selling a business that you built from the ground up isn’t easy and there are many factors to consider. I’ve been through the process of valuating a business, negotiating with buyers, and pouring over the complicated legal documents to complete the sale of Quick & Reilly. Although it wasn’t easy, selling the business is something I’ve never regretted and I learned a lot in the process. If anything my entrepreneurial spirit was lit up and I was energized to build my next business, Simon Quick Advisors. Today, it brings me great joy to work with clients, many of whom are business owners themselves, knowing I can draw on my experiences and help guide them in the right direction. 


DISCLAIMER

Simon Quick is an SEC registered investment advisor with offices in Morristown, New Jersey; New York, New York; Chattanooga, Tennessee; Denver, Colorado; and Los Angeles, California. A copy of our written disclosure brochure discussing our advisory services and fees is available upon request. References to Simon Quick as being "registered" does not imply a certain level of education or expertise. No information provided shall constitute, or be construed as, an offer to sell or a solicitation of an offer to acquire any security, investment product or service, nor shall any such security, product or service be offered or sold in any jurisdiction where such an offer or solicitation is prohibited by law or registration. Additionally, no information provided in this report is intended to constitute legal, tax, accounting, securities, or investment advice nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. It should not be assumed that future performance of any specific investment or investment strategy will be profitable, equal any corresponding indicated performance level(s), be suitable for your portfolio or individual situation, or prove successful.

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