Exiting your business: Part Three - Life After Selling Your Business – 6 steps to help you adjust and thrive

From the helm of your business to life after: Transitioning from running a business you've poured your heart and soul into can be a tumultuous journey. As the euphoria of selling fades, a myriad of emotions can surface, from exhilaration to anxiety, leaving you questioning your newfound reality.

In this pivotal phase of life, it's crucial to approach the transition with both sensitivity and strategic planning.

Embracing the Emotional Rollercoaster

Selling your business, whether that’s to retire or move on to a new venture, for many, heralds a wave of liberation – a perpetual holiday where time stretches infinitely. Yet, as the initial novelty wanes, a sense of unease may creep in. It's common to grapple with feelings of uncertainty, guilt, and even boredom. Suppressing these emotions only fosters unhealthy coping mechanisms, so as with starting your business with an exit strategy and ‘beginning with the end in mind,’ you’ll also need a post-sale strategy in place. One that starts with acknowledging, accepting, and processing the range of emotions that you will inevitably experience.

It's widely reported that a significant portion of entrepreneurs experience depression or stress during this transition. This vulnerability underscores the need for a supportive network and proactive self-care measures.

Here are six steps you can follow to help you adjust and thrice in this new phase of your life:

Find purpose beyond the business:

Your life before selling your business revolved around meeting milestones – securing investment, hitting targets, the first time you turned a profit, or were able to pay yourself a salary. Being an entrepreneur is fast-paced and exciting. In retirement, or once you let go of the business reigns, however, the terrain shifts. Setting new goals, both personal and professional, will help give you a sense of purpose and direction. Whether it's embarking on mentorship roles, investing in budding ventures, or pursuing passions long deferred, envisioning your post-retirement journey can reignite your sense of achievement.

Nurture your relationships:

For many entrepreneurs, the lines between business and social life blur, often at the expense of personal connections. As you transition into a new, slower paced phase of life, enjoy prioritising, fostering, and revitalising your relationships. Engage with old friends, forge new connections, and seek out communities aligned with your interests. Cultivating a robust support system is instrumental in combating feelings of isolation in this new phase of your life.

Prioritise self and family:

In the wake of the business sale, you might find that the weight of potential inheritance tax liabilities can loom large, clouding the joy of your newfound financial freedom. However, it’s important that you resist the urge to immediately tackle these burdens; instead, prioritise your own financial well-being.

Take time to enjoy quality time with your family, and once you have found your feet and re-established your financial goals, you can start the strategic planning of your estate, including tax-efficient gifting and trust utilisation, working with a trusted financial adviser can alleviate the burden while safeguarding your legacy.

Keep re-defining your financial goals:

Your finances demand even more attention, fine tuning, and careful navigation post-sale. While setting a budget is prudent, expect deviations as you acclimate to newfound freedom. Allocate sufficient liquid reserves to accommodate unforeseen expenses and indulge in well-deserved luxuries without financial strain.

You may be tempted to invest all the proceeds from your sale immediately, for fear of missing out on market returns. It’s important remember any investment conversation should start with- how much liquidity do you have, and how much liquidity you need – before thinking about the longer term. Erring on the side of caution is sensible, especially after a big life changing event, so work with a financial adviser who can guide you on sound investment choices and mitigate any the urge to hastily commit to long-term plans.

Work with a trusted financial adviser:

Working with a trusted financial adviser offers you a steady hand amidst the turbulence of this new life phase. Selling your business will catapult you into uncharted territory, rife with new complex decisions and potential pitfalls. An advisor, well-versed in the intricacies of post-sale financial management, provides clarity and reassurance, helping you understand and maximise investment options, tax implications, and estate planning strategies.

Moving on from your business often evokes a spectrum of emotions—from liberation to uncertainty – and having a professional confidant by your side can alleviate anxieties and foster confidence, tailoring their guidance to align with your unique goals and values.

Moreover, a skilled advisor will act as a strategic partner in goal setting and legacy planning. While retirement may signal the end of one chapter, it heralds the beginning of a new narrative – one characterised by personal fulfilment, philanthropy, and family legacies. By collaboratively crafting a comprehensive financial roadmap, the right adviser will help empower you to pursue your passions, support causes dear to your heart, and leave a lasting impact for generations to come.

Keep investing.

Transitioning from entrepreneur to investor also poses unique challenges. Whilst making difficult decisions on a daily basis may have helped you to become a successful entrepreneur; in the world of long-term investing, you will need to learn to resist the impulse to micromanage investments; and instead, adhere to a long-term strategy crafted in collaboration with your financial advisor. While dabbling in individual stocks or entrepreneurial ventures may pique your interest, temper such ventures with the stability of a diversified portfolio.

The journey post-business sale is a labyrinth of emotions and opportunities. Embrace the flux with compassion, wield pragmatism as your armour, and work with a seasoned adviser. Remember, retirement isn't merely an endpoint – it's a new beginning, brimming with promise and potential.