How to Plan for Life After You Sell Your Business
You had a dream, you worked hard and made it happen. And after years of hard work and dedication, you’ve decided that it’s time to sell your business. You now want to explore other avenues and enjoy the financial freedom you worked so hard to achieve. But like many entrepreneurs, you might know how to start living life after working so hard. Selling your business isn’t a one-and-done process. There are steps you need to take to make the transition into financial freedom as smooth as possible.
Why Are You Selling?
You’ve decided to sell your business, so there has to be a reason why. If it’s simply because you feel like you’ve outgrown it, then there’s no reason to debate whether it’s a good idea or not. On the other hand, there may be other reasons why you feel it’s time to move on. These may include:
- Early retirement
- Medical reasons
- Partnership disputes
- Feeling burnt out
Regardless of your reason why, you need a way to support yourself. Even with the proceeds from selling, you also need a financial cushion to fall back on. You might want to start investing, or you could consider selling your life insurance. Getting a life settlement can give you financial security you need to live well without worrying about earning money. When you sell to a third-party buyer, you can net a percent of your policy’s original value.
Know Your Company’s Worth
Proper valuation of your business plays a huge role in your financial longevity. Before selling, you need to know its real-world worth before accepting an offer. Work with an experienced advisor who can outline the different sales structures and how it can affect your final payout.
What to Do During the Sales Process
Since the sales process can last between three months to a year, now’s the time to create your new financial plan. Your goal is to live financially free, so are you going to make that happen? Are you going to sell your home and travel, or do you want to downsize and move into a smaller home? How you want to live plays an important part in planning for the future. Create a budget that will allow you to live the life you want without overspending. The biggest mistake you can make is selling your business and spending money the same way you did when you were receiving a paycheck.
Give Yourself Time to Adjust
Once your business is sold, you need time to adjust to your new life. If you were actively involved in the day-to-day processes, you might feel lost at first. Know that this is normal and with time, you’ll start to feel less like an outsider and more like a participant in this new lifestyle. Take a few weeks to relax and do all the things you didn’t have time to do. Maybe you want to downsize your home and travel or stay close to home and volunteer more. Whatever it is, you’ll be surprised how quickly you fall into a comfortable routine of being a retired business owner.