BUCKET LIST When you sell out, you will probably walk with a bucket of money. Quite possibly more money than you’ve ever had unencumbered, liquid, yours to do with as you please. You earned it. You deserve to use it. relatively fearless about investing knowing he could recover from any
mistake and loss because he had a high, regular income. Now he realized there was no new money coming in to replace losses. He had routinely treated himself and his family to several great vacations a year, maintained a seldom used vacation home and boat. Now, suddenly, all those expenses had no offset from earned income.
But ...
Everything is changed once your regular income faucet is turned off and disconnected from its source. No more paychecks. No more bonuses. No more personal expenses justified as business expense and paid with gross dollars. It all stops. This can be a shock, not just to you but to your spouse and family. Late last year, I helped a client engineer and complete the sale of his company to a competitor for millions of dollars, paid in cash. A bucket of money. But it wasn’t even two months before he was complaining about having no income! I reminded him that he had sold the income for the millions now in his bank account. While he acknowledged that and knew it intellectually, emotionally he missed his 1st and 15th paycheck. He had been
Yes, he would be getting interest and dividend checks from whatever portion of the millions went into his investment portfolio, but that didn’t feel like a certain paycheck twice a month.
Life after exit suddenly seemed very expensive.
This is why it is not enough to succeed at the sale of and exit from your practice. That IS a big achievement. The way it is structured financially is very important. But it is a “solution” that creates many “problems.” Family members will want money they weren’t asking for before. Friends will appear with business plans and slide stacks, asking you to invest. Sales agents from your local bank’s wealth management office to Goldman, your CPA, your brother-in-law the stock broker will all have advice for you. You won’t want to hurt anybody’s feelings by saying No. You’ll quickly be restless and too easily seduced by new opportunities. If you’ve ever seen the Alfred Hitchcock movie “The Birds,” you are now the target. First, a few birds show up. Then a lot. Then they all surround you, chase you, peck at you all at once. One of my clients, Ted Oakley, is a wealth management professional who works exclusively with sellers of businesses, $20 million and up. You will do this once. He has ridden along with hundreds and hundreds of sellers. I’ve been involved with many entrepreneurs’ exits and post-sale adjustments and lives. From Ted and me, here is some advice: 1. If at all possible, develop a financial and life plan for after the sale before you make the sale occur. Not just a financial plan. A life plan. It’s okay if it’s not all perfectly planned. But it’s common to be so focused on making
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