Imagine the excitement that accompanies the sale of business process.

You have worked so hard to build your business to become Investment Ready.  Years of preparing the succession and sale.  Then the sales program.  Negotiating with the would-be purchaser.  Lawyers, Brokers, Financiers and Accountants everywhere.

Then you sign and then your settle.  The eventual joy of converting your business into cash can be amazing.  Indeed… exhausting.

But that new world of independence and financial security can potentially turn into a strange sadness and sense of loss.

For many years we would always include ‘life beyond the business’ as a topic in most succession plans with clients.  All too often I was told “don’t worry about that Chris… we have missed out on travel for years.  We are going to sit on the beach somewhere and enjoy drinks with little umbrellas in them”.

That’s the danger sign.

These business owners have worked incredibly hard in their businesses, often 7 days a week, for many years.  They have always struggled to find enough time for themselves and their own lives and interests.  Their phone and laptop always by their side.  It was always the business first.

Sometimes, the friendly prospective purchasers have designed important roles for the vendors in the new structure.  Especially in ‘corporate roll-ups’ where the vendor’s skills are needed throughout the larger group.  Sounds great.

But the new big-company cultures and bureaucratic ways can be difficult to live with.  And the vendors must watch the new owners ruining their old business.

Relationships (and ongoing roles) can end very fast.

Suddenly, the former owners are effectively unemployed.  Lots of money but legally restrained from going back to what they know best.  The holiday effect wears off all too quickly.

I have a psychiatrist friend who once told me “Chris, never underestimate the impact on a person when they sell their business… depression is a very real consequence”.

It comes down to three things:

1. The loss of their day-to-day routine and discipline.
2. The loss of that passion and business creativity that fills owner’s heads.
3. The loss of a sense of identity that came from everything that business represented.

I have talked about this for decades.  Included it in client discussions at relevant times.  Lived and breathed it.  Helped clients prepare and deal with this many times.

I could never be caught by this loss… could I?

After we sold our former practice to a public company and I eventually departed a few years later, this loss caught me by surprise.  Who was I now?  What was my role in life?  What should I be doing?  What do I value?  How can I still do what I love to do?

For me… the answer lay in continuing working with business owners and helping them with their lives.  My wife tells me that my ‘retirement’ lasted just one week.

What is the solution?

Ideally, ‘life beyond the business’ should be a topic incorporated into discussions around future exit strategies.  Great if there is the time and energy to consider this.  Great to work building up the owner’s interests and find different roles and engagements that will survive well into the future.

But all too often that simply does not happen.

To avoid fixing a half-broken life a year or two down the track, far better to undergo a “Post-Exit Strategy Plan” soon after the wash up of the sale.  We have facilitated a few of these lately.

Ideally conducted at the point in time when the sale is complete, and once ongoing commitments to the former business will be clear.  The cash will be in the bank.  The tax commitments will be reasonably known and the hangovers from celebrations finally cleared.

Time to think about the next part of life.  This needs to be taken seriously.

Firstly, the money.

Is there enough to last you through your life?  Have you invested conservatively enough to ensure that the capital remains intact so that you never need to work again?  Can you always be sure that you don’t need to worry about money.  You could always supplement your finances with some work if necessary.  You just don’t want to run out of money in your eighties!

The discipline and diligence that you have followed throughout your business lives should not be lost in your post business phase.  Investment wisdom is vital.  Many former owners drop their guard and can make poor choices… choices that they would never have made a decade earlier.  With painful consequences.

You will need a cash flow estimate into the future… consider your spending, your lifestyle (holidays, toys), your children (weddings, house deposits, top ups) and grandchildren (education and support).  A financial advisor can help you develop such a model.

Once you have a clear picture about the money, you can relax and move to the next phase.

Secondly, what are you going to do?

What is it that you are passionate about?  Is it reading, golf, photography, driving, fishing, toys, travelling, wineries or movies?  Are these hobbies enough to sustain you, your brain, and your inner self?  Do you need something more?

This could be helping other people.  Charitable work suits many people… but not everybody.

As a former business owner, you probably have many amazing skills for running businesses… especially in your niche.  You also learned what was necessary to get the business “investment ready” and these skills could be very valuable to your former colleagues and your former industry associates.  For some people, there can be a role to help your fellow business owners. They might be prepared to pay handsomely too.

Thirdly, it might be time to re-look at your estate planning.

It might well be that you have plenty of money to last you throughout your lifetime.  Perhaps you have too much.  What are you going to do with it?

If you leave too much money to your children (or grandchildren), you might ruin their lives.  You would be aware of children (‘brats’) whose lives have been ruined by money.  Imagine a twenty something relative suddenly inheriting millions of dollars?  What do you suppose they would do with this?

Remember the old saying “if you don’t fly first class, your kids certainly will”.

Of course, these considerations lie on top of the corporate structures that are often left behind after the sale.  Lots of entities, trusts and possible tax issues that can be a bit messy.  All this needs to be fixed or managed as part of the estate planning process.

Fourthly, what about philanthropy?

It doesn’t have to be onerous.  It can be small scale, anonymous or even time and service based.  It could be more serious and structured through a Private Ancillary Fund (yours or shared) where the capital contributions can be fully tax deductable (in the same tax year as your sale) but the distributions (and benefits for the needy) can last decades.

Finally, think about what it is that motivates you.

What it is that makes you jump out of bed in the morning with a smile on your face?  What it is that helps you feel fulfilled every day?  What it is that builds resilience and strength to defend your health, wellbeing, family, and friends?  What it is that makes up the essence of vital people?

Have a look at yourselves and what makes you genuinely happy and fulfilled.  What goals have driven you to this point and how can they be adapted to steer you through to the next phase in life?  What does old age look like… it can be a little scary.  Can your home and lives be adapted to help you live independently to the end?

Above all, how can you get the most out of life.  There is probably a whole lot left and without a plan, you run the risk of just ‘drifting’.  A plan, with goals, with identified programs, purposes, and actions, can make a huge difference.

Obviously, the sooner you start, the easier it will be.  As always, we are here to help!