Selling My Business

03.14.19 Part One: Personal and Emotional Issues - Question & Answer #1

Question: What will I do after I have sold my Business?

Short Answer: you will have so many demands on your time that you will wonder how you ever found time to run a company.

Longer Answer:
Although this may seem an unusual choice for a first question, this is the one I am most frequently asked when a business owner seriously starts thinking about selling. 

Many business owners are quite naturally wary of the prospect of selling their businesses.  For years, building and nurturing their companies have been the focal points of their day-to-day existence.  For many business owners, everything, including friends, family, community, and personal desires have taken a back seat to their intense drives to survive and to succeed.  Self-image is often defined by their role as “The Owner.”  Rarely is any personal decision made without relating its consequences to the business.  Quite understandably, it is difficult for these owners to foresee a personal identity separate from that of owner.

If this sounds all too familiar, don’t worry: All of these concerns will resolve themselves if the sale of your business generates your definition of wealth and personal freedom.  You must, however, accept the fact that after you have completed the sale, you will still be the same person.  Motivated by different goals perhaps, but nonetheless the same person.

The primary difference, however, will be that you will have exchanged your illiquid business for wealth and freedom.  Instead of focusing on what it takes to survive as a business owner, you will be free to focus on fulfilling yourself as a person.  Each day your activities will be self-initiated rather than motivated by the business demands thrust upon you.

One of my clients astutely anticipated the sea change that becoming a “former owner” would have on his life.  He concluded that the one thing he could not give up, post-sale, was an office.  He knew that he needed a space, outside of his home, to use as a base so he rented an executive suite.  Two month prior to closing, he had everything in place (furniture, computer, phone service) so that he could move smoothly through the transition process.  To this day, when not traveling, he spends each morning in his office, reviewing financial publications, tweaking his portfolio, and analyzing potential new venture.  Initially, the office provided a bridge between his old life and his new life.  Now, it is his safe haven.  He is a classic example of the entrepreneur that does not retire – he refocuses.

It is not unusual for spouses of sellers to be apprehensive about how their lives will be affected by a business sale.  In one case, the wife of a seller informed him that she agreed to marry him “for better or worse-but not for lunch everyday.”  This seller took the hint and structured an employment agreement that paid well, allowed flexible hours, and most importantly, kept him out of the house at lunch time.  You, too, will have to find the right balance with your spouse.

Former business owners rarely spend the rest of their lives just playing.  Most re-channel their energies into new ventures that create additional wealth with less financial and personal risk.  If you have started and managed a successful business, and most importantly, have figured out the right time to sell your business, you are certainly capable of figuring out how to make the rest of your financially-independent life happy and fulfilling.

Don’t wait until after the sale to start thinking about what you want to refocus on.  Start this process now.  If you are struggling with the decision to sell, start listing what you could be doing if your business did not consume your time.  Many sellers have told me that once they had completed their lists, they could visualize a wonderful life after closing.  The ability to imagine a life after closing facilitated their decision to sell.

No one can tell you what it will take for you to be happy over a long period of time.  I can, however, share my observations as to how many of my clients have dealt with their “PSSAS” (Post-Sale Separation Anxiety Syndrome).

After you have sold your company, plan on doing absolutely nothing.  This is not as easy as it sounds.  If you are like most hard-charging entrepreneurs, you will need to learn to relax.  While running your business, you are extremely focused, disciplined, and creative.  You, of all people, know what it takes a tremendous amount of sustained energy to achieve success.

On the day you close on the sale of your business, you will have several conflicting emotions.  You may feel simultaneously elated, relieved, melancholy, and nostalgic.  The closing itself is anticlimactic.  You may feel a sense of let-down and apprehension, i.e., “What do I do now?”  If may simply take time to absorb the fact that you are off that disciplined, high-speed treadmill that was your former business life.

Remember, however, that even while you were on that treadmill, you had a personal life.  You traveled (albeit occasionally), golfed, skied, read, spent time with your kids, took photographs, or volunteered with your favorite charities.  Something helped you to decompress from the stress of business.  Once you’ve closed the sale, you will have the opportunity to enhance and to cultivate the activities that you enjoy.

It is imperative that you learn to relax, and having fun is one of the best ways to do so.  Take a trip with your favorite person to that place you have always dreamed about.  Immerse yourself in your favorite sport and achieve that level of excellence you could only dream about when you were working 80 hours each week.  Buy the toys that will allow the “kid” inside you to reemerge.  Surprise a loved one with a special gift.  Do something for your favorite charity.  The list of fun things to do is limited only by your imagination.  Go ahead: Indulge.  You’ve earned it.  Don’t feel guilty about not being at the office.  This is your time to decompress.  This is your time to start enjoying your newly acquired freedom.

Another concern common to business owners is that by selling their businesses they will lose their “platforms” in the community or in their trade associations.  They worry that once they are separated from their businesses, their status as highly-respected civic leaders and leaders in their industries will be in jeopardy.

This should not be the case if you stay active and involved in organizations you’ve always belonged to.  Join a few new organizations, as well.  And remember, people will think more highly of you now than ever before.  They will refer to you with a certain amount of awe, respect, and yes, envy.  “Did you hear that John made a killing when he sold his company?”  Think about it.  You’ve known people who have successfully sold their businesses.  What were your thoughts when you heard the news?  Colleagues and competitors are envious because you were shrewd enough to develop and execute an exit strategy.  This attitude and respect is nourished by their speculation that you have sold the company for far more than you actually did.  Savor this respect.  Again, you’ve earned it.

Consider establishing your own private foundation.  Nothing maintains high profile and visibility in the community more effectively than going into the business of giving money to worthwhile causes.  You will have all of the influence and attention you ever wanted-and more.

Most of my clients simply cannot repress their entrepreneurial instincts.  When you were running your own business, you had to live by the golden rule: “The person with the gold makes the rules.”  Now that you have sold your business and are financially independent, you are the person with the gold, so now, you make the rules.  If word gets out that you are looking to invest in business opportunities, you will have a new full-time job sorting through and selecting those opportunities that met your investment criteria.  If your terms and conditions for investment aren’t met, you politely decline and start reviewing the next available opportunity.  There is no such thing as the last good deal.

When you find the right investment opportunity and it is on your terms, then you choose how active or passive you want to be in the management.  Rarely do former owners choose to involve themselves in day-to-day management.  More likely, you will prefer a seat on the board of directors, thus enabling you to remain active in the business on a regular basis and on your terms.  In addition, you will enjoy the satisfaction of telling your buddies that you are “dabbling in this and that company.”

After the initial period of adjustment, you will discover so many fun, interesting, challenging, and fulfilling activities that you will wonder how you ever had enough time to run your business.  If you remain unconvinced, I have one last assurance: In all of the transactions I have ever completed, never once has a client returned and complained, “Gee, Ned, I wish I had never sold my business.”

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* This information is for general purposes only and is not intended to constitute any specific legal advice of any type.