There could be any number of reasons for you to leave your business. You might have achieved all your goals and feel like a change of scenery, or you may be facing health problems that will make it more challenging for you to run your business in the near future.
You may have sold your business earlier than you intended to. Someone might have made you an offer out of the blue, and although you hadn’t considered selling at this point, the offer’s made you re-evaluate your future. Or you might have decided that now's the time for that family member you've been grooming to take over, because you've got new opportunities you want to pursue.
Whatever the reason, it's never too early to start planning the next stage of your life, and it doesn't have to be retirement.
Going Part-Time
You might still want to work but set your own schedule other than the usual nine-to-five. You’ve delegated people to take over your management role as you step down from it. This gives you the freedom to reduce your involvement and enjoy more leisure time while still maintaining a role with your business.
Merge With Another Business
This option also means you might be able to take things a bit easier while still retaining some involvement in the business. Merging with another company could offer the opportunity to let others take over the day-to-day business, while still allowing you to be as involved as you want to be. Just make it clear when you merge that your goal is to step away somewhat from the business, so your new partner knows exactly what your goals are.
Selling and Walking Away
If you’ve been fortunate enough to have built up a business that you can sell for a considerable amount, well done! It’s the goal of most entrepreneurs to not only run a successful business, but also to realize a capital gain at the end which can see them onto the next stage of their life with a sizeable nest egg.
Protecting the Proceeds
You’ve worked hard to build up a successful business, and you’ve been able to sell it for a good price. Now it’s time to protect those proceeds, so that you can be sure of a stable future. The best ways to do this are:
- Consider a diversification plan. Your financial advisor will help you to put together a diversification plan that’s tailored for the amount you’ve received, your age and your future plans.
- If you've received a mix of cash and shares in the company that bought you out, check to see how you can realize gains, such as the dividend policy. Determine the best way to hedge against a downside on the stock you receive, because the last thing you want is seeing what you thought was a significant return evaporating if the stock takes a hit.
- Consider passive income options, such as commercial real estate.
- Review what exposure you have to any liability, especially if you’ve left money in the business that the new owner is paying back. If you've left significant assets in the business, make sure you retain the ownership until you are paid up. Resign as a director or owner, so you have no liability from trading.
This how to make sure that you hard-earned proceeds are not only protected but also positioned to provide financial security and support your long-term goals.
Investing the Proceeds in Your Next Step
Selling your business opens the door to new opportunities. Here are some ways to reinvest the proceeds and stay active in the business world:
- Angel investing, which is where you provide funding to promising startups in exchange for equity. Look for businesses with sound plans, working prototypes, and customer contracts. Expect a clear exit strategy and potential for a return on investment.
- Venture capital, where you would invest larger sums in fast-growing companies poised for significant market impact. Prioritize industries with high revenue potential and proven management teams, aiming for substantial annual returns.
- Buying another business, since you can use your experience to acquire a competitor, supplier, or entirely new venture. Carefully evaluate the dynamics, especially if competing with your previous business.
- Starting a new business, especially if you have a fresh idea. Leverage your expertise to navigate planning, funding, and growth with confidence.
- Consulting, where you share your knowledge as a mentor or advisor, helping other business owners succeed while enjoying flexibility and independence.
Each path offers unique challenges and rewards, allowing you to stay engaged and make the most of your hard-earned success.
Next Steps
- Assess your financial goals, personal interests, and readiness for a new challenge. Understanding your motivations will guide your decision-making process.
- Work with financial advisors, mentors, or business consultants to help you create a clear plan for the next stage of your life. Their expertise will help you navigate investment options, tax implications, and more.
- Whether you’re considering angel investing, venture capital, or buying another business, research each option thoroughly to identify which aligns with your goals and risk tolerance.
- If you choose to remain involved in the business world, think about the long-term impact of your decisions, including how you want to contribute to the success of future entrepreneurs or organizations.
If you’re looking to remain engaged in work, there are many things you can do to keep yourself busy after you step back from your business. Whether you stay with your current business part-time, start up your business or consulting agency, or invest your money into someone else’s business, you can find the option that works best for you and meets your needs.