Managing Investments Post-Business Sale

Based on insights from the ‘Exit Like a Boss Podcast – 21-Step Challenge‘, this blog covers Step 19 – Investment Planning.

You’ve made it. You’ve sold your business, pocketed that hard-earned check, and now you’re faced with a new reality. As a business owner, you were accustomed to the ebb and flow of finances, investing in your business when needed and reaping the benefits when possible. But post-exit, this dynamic undergoes a seismic shift. You’re no longer pouring money into your business, and it won’t be generating income for you either. So, where does your revenue come from now? This is where ongoing investment planning steps in, and it’s vital.

Understanding the New Reality

The first thing to recognise is that for the first time, your primary source of income will be your investments. While this is perfectly feasible, it necessitates a shift in mindset and a solid strategy. Previously, the business provided; now, your investments will.

Prolonged Life Expectancy and Increased Spending

Life expectancies have dramatically risen, presenting a unique financial challenge. You may live 20 to 30 years after retiring, meaning you need your finances to last longer than ever. Moreover, post-retirement, having more free time often translates to more spending. Travel, hobbies, and adventures become part of your routine, potentially costing more than your working days.

This brings us back to the importance of setting the right financial goals. Meticulous financial planning ensures you know exactly what you need to fund your retirement. How much do you need from the sale of your business, combined with other assets, to sustain your desired lifestyle?

Seek Professional Guidance

Investment planning at this stage is not a do-it-yourself project. It requires expert guidance. A financial advisor can help you chart a course based on your goals, debt situation, desired lifestyle, and other critical factors. They can help you select appropriate investments and design a strategy that aligns with your vision.

In essence, this episode underscores the shift from preparing for the exit to navigating life after the sale. Your wealth, once anchored in your business, now sails through the seas of investment. Planning for these waters requires careful attention and the right guidance to ensure you continue to ‘exit like a boss’ even after the sale is complete.

This article was originally published on capitaliz.com.

Dr Craig West

Founder & Chairman | Succession Plus

Dr Craig West is a strategic accountant who has over 20 years of experience advising business owners.

With a background as an accountant in practice and two master’s degrees, Craig formed a strong view that the majority of business owners (and often their advisers) were unprepared and unaware of the steps required to prepare for exit. He then designed and documented a unique 21-Step Business Succession and Exit Planning process to assist owners and their advisers in navigating this process.

Craig now acts as a strategic business and financial mentor for mid-market business owners. Craig has written four critically acclaimed books educating business owners on employee incentives, succession planning, asset protection, and exit strategies. Additionally, he has completed doctoral research on Employee Share Ownership Plans (ESOPs) for succession.

Craig is a Member of the Forbes Business Council where he leverages his extensive experience to contribute valuable insights on helping business leaders navigate the complexities of growing and exiting their businesses.

In April 2024, the Exit Planning Institute admitted Craig to the International Exit Planning Circle of Excellence.