What is one thing an entrepreneur should do after selling their company?
To help entrepreneurs determine the next steps after selling their company, we asked business owners and consultants this question for their best advice. From reinvesting your profits to leaning into your next growth plan, there are several suggestions that may help you with the following stages after selling your company.
Here are 12 things entrepreneurs should do after selling their company:
- Reinvest Your Profits
- Introduce the New Owners
- Diversify the Proceeds
- Hedge Your Bets
- Find Ways to Grow
- Get Your Money Organized
- Plan the Taxation On Your Proceeds
- Pay Off All Debts
- Keep Your Contacts
- Step Away
- Examine Your Liability Coverage
- Lean Into the Next Growth Plan
Reinvest Your Profits
After selling a company you should have a plan for where you want to reinvest those profits. If you don’t plan on diving right into your next project, it’s best to reinvest that money into safe investments that can provide you income for the rest of your life. Real Estate, high-yield savings accounts, preferred stocks, corporate and municipal bonds are all ways avenues will provide you with passive income. Once you hit liquidation, you did all the work to build your company from the ground up, so ideally you want to put that money back into work for you, if you have a business, have a look at how to get free TikTok followers, this can help you sell it faster.
Tom Mumford, Undergrads
Introduce the New Owners
After selling a company, entrepreneurs should introduce the new owners in a formal announcement. For instance, a blog post, video interview, or email to stakeholders. This gesture shows that the company is changing hands on friendly terms and can generate increased goodwill and open-mindedness towards the new owner on the part of the clients. This announcement also makes a clear distinction between your reign and your successor’s start and prevents your legacy from getting confused with the choices of the new owners.
Michael Alexis, TeamBuilding
Diversify the Proceeds
Make sure you diversify your holdings. Consider immediately diversifying the proceeds of the sale if you received cash from the sale. Combining mutual funds, municipal bonds, money market accounts, and real estate is a smart investment strategy. Diversification plans will vary based on the number of proceeds, the number of other assets you have, and your age. You may benefit from consulting with an experienced financial advisor.
Nick Shackelford, Structured Agency
Hedge Your Bets
In my opinion, if you received stock rather than cash as a result of selling a company, you should immediately find the best approach to hedge against the stock’s downside. There is no worse feeling than walking away with what appears to be a substantial return only to see it evaporate when the stock you received begins to fall. This has happened to a lot of folks. Begin designing your hedge strategy even before the firm is sold. Enlist the assistance of an experienced stockbroker or financial advisor.
Gerrid Smith, Joy Organics
Find Ways to Grow
Search for growth opportunities. One of the worst things to fall into after selling a company, or taking any step forward in your successful career, is entering a place of stagnancy. While there is nothing wrong with rest, abstaining from growth can lead to anything from depression to retrograde. Ensure that you are immediately searching for ways to grow–whether personally, or in business–when moving forward from a prior venture.
Karina Karassev, Stori
Get Your Money Organized
After selling your business, you will have a lot of cash that might be in multiple accounts & will be hard to keep track of all your expenses. Dealing with that many bank accounts open will lead to a lot of statements being sent to you which can be daunting & time-consuming to deal with. Look into hiring a bookkeeper for your accounts in order to make sure that your finances are in line with your spending. Your bookkeeper can meet with you once a month to go over how your accounts are doing & break down certain areas of spending.
Sacha Ferrandi, Source Capital
Plan the Taxation On Your Proceeds
The first thing you need to remind yourself is that all the income you have just generated through the sale is not entirely yours. You will be parting with a certain percentage of your proceeds in the form of taxes. And getting the taxation process right is extremely crucial. Hiring a professional taxation team is the best bet. A professional team has all the necessary experience, expertise, and personnel to review your taxation process and will take into account every compliance and regulation related to your sale. This will give you complete peace of mind as far as meeting legal requirements is concerned and allow you to move forward knowing that this chapter is closed for good.
Krista Haws, Dripped Coffee
Pay Off All Debts
Before starting another business venture, any outstanding debts should be paid off. Personal obligations include credit cards, car loans, and most other bills involved with the business. Before starting another venture, these should be paid off because it can lead to complications if they aren’t settled. This is especially true when co-signing on loans with partners or investors in a new business. If one party defaults, all parties involved could face legal action such as lawsuits and possibly losing their investments.
Chris Thompson, Backdoor Survival
Keep Your Contacts
Whoever you relied upon to get your previous company going should remain locked in whatever digital Rolodex you use. Even if you want to take a break, explore new avenues or spend more time with family – be sure to stay in contact with those investors, vendors, and customers who helped make you successful. When the time comes to try something new (a successful entrepreneur never runs out of ideas or enthusiasm), go back to them and make them hear your newest idea. People, in general, are receptive to hearing new ideas, particularly those who responded so well to you the first time. The goal for all entrepreneurs is to put their product in front of as many people as they can find because eventually, they will find someone who will listen and be intrigued. If you already have a ready-made group of interested people, that’s something worth maintaining. Keep those channels of communication open because you never know when you might need them again.
Joel Jackson, Lifeforce
Selling your company as an entrepreneur is the business version of having your baby adopted. You should step away and let the business be taken care of. You’ll make yourself crazy if you follow what’s happening with your former business. If it’s doing better under the new ownership you might feel bothered. If it does worse, you may feel guilty. Just follow Elsa’s advice and “Let it go! Let it go!”
Jennifer Pieniazek, Resume Now
Examine Your Liability Coverage
In my opinion, now is the moment to assess your liability exposure. After all, you now have substantial assets that someone could pursue. Check to see if you have enough primary and umbrella insurance coverage. Analyze whether you are exposed to personal financial risk in any other businesses you hold, such as general partnerships or sole proprietorships, and get out of those as soon as possible by incorporating or forming an LLC. If done correctly, incorporation can ensure that the entity, rather than you personally, is accountable.
Rameez Usmani, PureTuber
Lean Into the Next Growth Plan
Selling your company should be part of your overall growth plan. So when you sell you have a reason, the sell is something you have as a strategic decision to get you closer to your Big Hair Audacious Goal. So, my guess is, if you are asking the question then you sold your company too low. You sell into your next plan of action. I would recommend starting your growth strategy to establish the next and future steps.
Donna Hover, Mighty Underdogs Company