Selling your business is a big deal. Not only can it set you up financially, but it can also usher you into the retirement lifestyle you’ve always wanted.
However, there can also be some other, not-so-well-known consequences that come with selling your business. Folks who’ve sold their companies frequently say things like, “Just a few years ago, I was somebody. I owned a successful business. People took their orders from me. I was known in my community and respected in my industry.”
“Then, I sold the business,” the story continues. “It was supposed to be a dream come true. Sure, I’m financially secure. But who am I today? Just some guy in line at the coffee shop. No one knows me. No one cares what I think. Is this what it was all for?”
Ouch. The fact is that, for many entrepreneurs, the transition to life after selling your business can be challenging. After all, you spend decades, perhaps your entire adult life, building your business. Then, one day, you’ve sold the company and you’re starting all over.
According to a whitepaper written by the Columbia Business School, “While the sale of a company can mark a significant success for an entrepreneur, the reality of selling a venture often represents a loss of identity and community. Entrepreneurs may go through several stages of recognizing and coping with this loss, and this process can sometimes take years.”
Life After Selling Your Business: Beyond the Dollar Signs
It doesn’t have to happen this way. But to be ready for this next step, you first need to know what actually makes people happy. And I’ll give you a hint: it’s not money.
Sure, everyone wants to be comfortable, and everyone wants stability and security, a few nice things. But studies repeatedly show that accruing more wealth (beyond basic necessities, of course) does not correlate to greater happiness.
What Can Make Us Happy?
- Having a purpose—It might be changing the world, or it might be taking care of your kids or grand kids, but either way, you need a mission.
- Connecting with people—Meaningful relationships are essential. Humans are a social species. Relationships bring us joy, meaning and purpose.
- Having “flow” experiences every day—By “flow,” we mean the feeling you get when you’re “in the zone.” Athletes talk about it a lot, but we all experience flow when we do something challenging that we’re really good at. Time flies, and we’re one with our actions. It’s a great feeling.
It’s quite likely that running your business used to meet a lot of those needs—people to connect with, a purpose to fulfill, and a feeling of flow every day. As the Columbia Business School study put it, “For many entrepreneurs who have invested a vast amount of financial and emotional capital in their business, the experience of selling and moving on may involve a loss of identity and purpose, despite the financial security that usually accompanies the sale.”
If you’ve sold your company, those opportunities might be gone for you. How will you find them?
This is why so many people start another business late in life or even try to buy back the business they sold. It did a lot more for them than simply pay the bills.
So, how can you avoid ending up feeling lost? Think through the non-financial changes you’re in for at least as carefully as you deconstruct every line of the deal. What do you want your life to be about, and how can you make sure that happens? Start thinking about what’s next well before your morning is missing the things that previously brought you meaning.
Sales Come in Many Sizes
As they begin to think about selling their company, many business owners don’t realize that “selling” isn’t one-size-fits-all.
The reality is, there are various ways to ease off on your responsibilities and get some liquidity out of the business without selling it outright. It’s your company, after all. More importantly, it’s your life, and only you can decide what’s right for you and your family. Your financial advisor is just there to help make it happen for you.
And for those who’ve already sold their business and are feeling like all they are is another person in line at the coffee shop, remember: you’ve been here before. It just didn’t bother you then. So, the problem isn’t being in line; it’s deciding what to do next and getting to it. And that’s a problem you can solve.
JD With over 25 years of experience, Marc brings a variety of skills to Wealth Enhancement Group. Formerly the CEO of Strategic Liquidity Services at JOYN Advisors, Marc excels at orchestrating professional teams that can help business owners make the most of their liquidity options. Marc leads clients through a process that allows them to get what they want at “the intersection of the corporate and the personal,” with a heavy emphasis on tax planning in cooperation with tax counsel. Marc’s...Read More