Selling a Business is Exhausting Without a Post-Sale Plan

Time consuming. Emotionally draining. Exhausting.

All these feelings come into play when selling a business.

But you can lessen these stressful feelings if you spend time thinking through your post-sale plan.

Some questions to consider: What do you want for your former business? What do you want your life to be like after the sale? What will be your legal liability? By answering these questions, the transition from business owner to life after business can be smoother and less stressful.

Nine Things to Do After Selling Your Business

1. Take a Long Breath: Selling your business can take a long time, sometimes as long as a year to find the right, qualified buyer. After such a long process, it’s time for you to sit back and “collect” yourself before moving on to the next project.
2. Recognize Your New Reality: Even if you’re not wealthier now than when you owned your business, realize that your income is now in the bank, not a simple business draw. Learn to manage your funds accordingly.
3. Seek Out Professional Money Management: Find a money manager sooner than later. There are many hands involved between a bank and the wholesale money market; and each one of those hands is taking money out of your pocket.  Look for someone who has direct access to a money market to ensure you’re receiving the return rates you deserve.
4. Draw Up a New Balance Sheet: Now is the time to examine your balance sheet. Your affairs may be more complex than you think, and it’s best to understand which money market funds are best accessed from a tax advantage.
5. Get Organized: You may have money spread over various accounts – family trusts, holding companies, personal banks. Sellers often find that keeping track of all these accounts is overwhelming. Consider hiring a part-time bookkeeper to organize your finances for tax time.
6. Communicate Your New Reality to Key Family Members: Business sales can have many twists and turns, allowing for misunderstandings to arise. Actively communicate changes to key persona to avoid anxiety and unpleasantness.
7. Get an Estimate of Taxes Owed and When: Get an estimate of your tax liability. You may find that the liability is due over a number of years or some may be deferred indefinitely. Also, look into potential strategies to shelter income, such as philanthropy and insurance. Focusing on your tax liability could be the best way to increase your net worth from the sale.
8. Audit Your Current Estate Plan: With the sale of your business, it is likely you will and insurance will no match your new circumstances. If you will contains provision dealing with privately held shares of your recently sold company or the executors of your estate are incapable of handling your new status, it is time to update your plan.
9. Develop an Approach for Loans to Your Family: Family and friends may ask you for a loan from your sale proceeds soon than you think. Some things to consider include asking for a security deposit or documentation of the loan. And how will repayment be made? these are sensitive issues and require serious thought. You can always buy time by telling potential borrowers that your money is tied up with advisors.

“Fewer than 25% of business sellers have pre-planned the sale of their business,” according to Mark Borkowski, President of Mercantile Mergers and Acquisitions Corporation. And while it may be emotionally exhausting to develop an plan for your post-sale life, it is comforting to have one in place.

To help develop an post-sale plan for your business, contact a professional business advisor such as Sunbelt Business Brokers – Milwaukee at 262-901-0086