Preparing For Success After You Sell Your Business
Preparing For Success After You Sell Your Business
You’ve worked hard to build a business that makes you proud. In many ways, your identity has been wrapped up in this brand, but now it’s time to move on. Looking ahead to the days after you sell is an important step in preparing for a successful transition. Let’s consider the stories of a couple theoretical business owners and the questions they should be asking to be ready for a future after their business.
Ready To Retire
Joe built his business from scratch, and has decades at the helm. Now that he’s ready to sell, he is likely to transfer ownership to someone outside his family, but he doesn’t have a formal strategy in place just yet to make that happen. After he sells, he’s looking forward to spending time on his passions — volunteer work, traveling, and generally enjoying retirement with the ones he loves.
Retirement Questions To Ask
- How diverse is my investment portfolio and how secure is my income stream?
- You and your advisor should take a look at how much of your net worth is tied to your business and how that might affect your income in retirement and your ability to reach your goals.
- What do I want to be doing everyday?
- It can be hard to imagine life away from your business, but putting together a clear picture with your advisor can provide a framework for what retirement can look like.
- What are my philanthropic goals?
- In addition to estate planning and spending, you and your advisor should look at how you can strategically divert income from the sale of your business to help causes you care about while maximizing your tax savings.
Still Enjoying The Hustle
Susan is a millennial who built her business from the ground up. Now she’s thinking about selling, with the possibility of transferring ownership to a family member. She, too, doesn’t have a specific strategy in place to make that happen. She isn’t ready to leave the business world and may stay involved in her business in an advisory role, invest in or start another business, or go on to teach the leadership skills she has learned.
Career Questions To Ask
- How much of a role do I still want to have in my company?
- If you plan to still be hands-on, will you have a specific title with the company? Will you still be receiving an income for your work?
- Will I be buying or investing in another company?
- Talk with your advisor to discuss how much money you need to make that purchase.
- Will you be working full time with a livable income? Or will you need to live on savings?
- Discuss with your advisor the benefits of a consulting vs a full-time role. Remaining full-time will enable you to continue to take advantage of employer benefits like retirement plans, healthcare, etc. If free time is your priority, consulting might be the best route for you.
What Matters At The End
Whether you are retiring altogether like Joe or moving on to another hustle like Susan, one thing remains the same: you need to have a plan in place to make the lifestyle you’re mentally preparing for a reality.
Working with your advisor, you can think through and hash out any pitfalls or obstacles before they arise. When you get a strategy in place now to secure your future, you can leave your business in the best hands and start your new adventure with confidence.