Congratulations. You've sold your business — and now, you need to figure out what to do with the free time, energy, and resources at your disposal.
There are lots of things you can do following your business sale. With the right approach, you can optimize your time, energy, and resources now and in the future.
You've Sold Your Business — Where Do You Go From Here?
Here are five tips to help you move forward with your life after you've sold your business.
1. Evaluate a Variety of Investment Opportunities
Investing offers a wide range of growth opportunities. Yet, diving headfirst into investments is rarely simple.
Generally, it pays to take a gradual approach to investments. That way, you can slowly and carefully build your investment portfolio and watch your money grow over time.
Many investments are considered recession-proof, too. These investments include:
- Precious Metals: Demand for gold, silver, and other precious metals tends to rise during a recession.
- Dividend Stocks: You can purchase stocks that pay dividends, i.e. payments that companies make to their shareholders in lieu of cash. A dividend allows you to earn passive income from a business as long as you own its stock.
- Real Estate: When a recession hits, home prices tend to plummet. In this scenario, it can be beneficial to purchase real estate that you can use as rental property or sell for a profit down the line.
If you're on the lookout for investment opportunities, meet with an advisor. From here, you can get tips and recommendations to set up an investment portfolio and explore ways to get the most value out of it.
2. Plan for Your Family's Financial Future
Review your current finances and map out your family's financial future. As part of your efforts, you can:
- Make a Will: If you don't have a will, make one that stipulates who will receive your property and assets after you die. Determine your beneficiaries and select an executor who will manage your estate following your death. Also, collect bank and financial account numbers, and other important documents, and ensure your beneficiaries and executor know where to find them.
- Create a Trust: You can put together a trust that names a trustee to manage your assets and property upon your death. A trust offers flexibility, as you can update it at any time. Meanwhile, a trust lets you determine a trustee who can make legal and medical decisions on your behalf if you become incapacitated and unable to do so.
- Establish a 529 Savings Plan for Your Kids: For those who have young children and want to send them to a top college or university, a 529 plan can help them achieve their desired results. The plan is simple to set up and provides tax savings when you save for a child's future education costs. Assess multiple 529 plan options and select one that aligns with your finances. Then, you can set up a 529 plan that benefits your child as he or she pursues their educational goals.
- Determine Who Will Take Care of Your Children: Decide who will become your child's legal guardian if you pass away. This individual should have a child's best interest in mind and serve as a positive role model to him or her.
Collaborate and communicate with family members as you plan for their financial future, too. Together, you and your family can determine the best course of action to ensure your loved ones are protected after your death.
3. Explore Ways to Limit Your Tax Burden
It can be difficult to optimize the earnings from your business sale if you do not prepare for the tax ramifications of it. But, there are several things you can do to limit the tax burden associated with your business sale, such as:
- Consult with a Tax Advisor: Partner with a tax advisor who can review your business sale and capital gains tax considerations. Next, the advisor can offer recommendations, so you can reduce your tax burden.
- Capitalize on Charitable Donations: If possible, contribute money to charities before the end of the year. This enables you to give money toward great causes. At the same time, it can help you earn tax savings.
- Offer Gifts: Reward those who have helped your business thrive. You can provide gifts to anyone you choose for up to $15,000. And, any gift you give is tax-free up to a lifetime amount of $5.43 million.
Taxes can put a major dent in the money you earn from your business sale. If you evaluate ways to minimize your tax burden, you're well-equipped to maximize the earnings from your sale.
10 Things To Do After You Sell Your Company | Alux.com
4. Take a (Much-Needed and Much-Deserved) Break
You may have committed many years to building a successful business. In doing so, you likely made sacrifices along the way. At this point, one of the best things you can do is look back on your career to date and prepare for the future.
Ultimately, taking a break after selling your business can help you relax. The break gives you time to clear your head and focus on what's most important: your personal health and wellbeing.
Furthermore, a break from the hustle-and-bustle of running a business can give you additional time to spend with family members and friends. You can use this time to go on vacation or pursue various life goals as well.
The bottom line: a break from work can make a world of difference. If you spend a few weeks or months taking care of yourself after your business sale, you can focus on feeling your best once again. You can then put yourself in a great position to make an informed decision on what to do with your life going forward.
5. Retire Early
If you find you have sufficient money and have accomplished your career aspirations, you may want to retire early. In fact, there are many benefits associated with early retirement, including:
- Improved Health: You can use the extra time away from work to walk, maintain a nutritious diet, and enhance your overall health.
- Global Travel Opportunities: Early retirement gives you ample time to travel the world.
- New Relationships: You can focus on fostering relationships with your loved ones or serving as a mentor for those interested in pursuing a career in your field.
Early retirement opens many doors following a business sale. Consider the option carefully. And remember, if you find early retirement does not meet your expectations, you can always explore part- and full-time work opportunities at a later date.
Move Forward Following Your Business Sale
Embrace your business sale as an opportunity. The sale represents the conclusion of your involvement in a company. It also frees up time, energy, and resources that you can use to pursue personal and professional interests and goals.
There are many options to consider as you prepare for life following your business sale. Assess a variety of personal and professional interests and goals, and you can weigh the pros and cons of myriad options on what to do in the future.