You sold your business. Now what?

Selling a business to which you’ve dedicated your life can be an emotional whirlwind. When, after months or even years of careful planning, closing day finally arrives, a flurry of activity ensues, with phones ringing and emails flying back and forth as lawyers and advisors handle the final details. Finally, the i’s are dotted, the t’s are crossed, the paperwork is signed, and the deal is done. There’s a sense of relief, mixed with excitement and uncertainty. Then comes the moment of truth, accompanied by the daunting question: “Now what?”

Scenarios like this will continue to play out across the country as more businesses change hands. Indeed, 61 per cent of the leaders of small and medium-sized businesses in Canada are preparing for retirement in the next decade, according to the latest KPMG Private Enterprise^TM Business Survey.

As business owners transition from entrepreneurship to retirement, they often face unexpected challenges. Business owners know how to run their businesses, so letting go and facing the unknown can be difficult. Many find themselves pleading with buyers to keep them on as consultants for two or three years, often for nominal salaries.

This reflects a common struggle: Business owners lack clear plans—not only for what they want to do with the rest of their lives, but also for managing their newfound wealth. Time and again, they regret solely focusing on an exit or succession plan without considering what comes next for themselves. Many are accustomed to living modestly and suddenly find themselves millionaires when the money shifts from being on paper to being in their bank account.

Conflict can arise from all directions, leading to feeling overwhelmed and confused. One spouse may dream of taking a cruise around the world, while the other wants to save as much wealth as possible for the next generation. Adult children may react negatively—some even taking legal action—over the potential loss of an inheritance when their parents suddenly decide to be philanthropic after a lifetime of not espousing the importance of giving back.

Adding to this, a business sale often brings a slew of advisors, bankers, and investors to the door, and there’s uncertainty over who to trust.

“Now what” indeed.

When it comes to planning for life after the deal closes, there’s no one-size-fits-all approach. However, a fundamental starting point for any business owner is to clearly define their goals regarding wealth.

For those in wealth accumulation mode, such as families who want to leave substantial inheritances to their children, the focus will be on growth and investment opportunities. Diversifying assets is crucial, exploring options like alternative investments, real estate, private investments and private equity funds, all while understanding their risk tolerance.

On the other hand, wealth preservation prioritizes protecting and maintaining existing wealth, encompassing strategies like estate planning and tax efficiency.

Philanthropy also presents tax benefits, but a business sale also brings to the surface the idea of making a meaningful impact. After coming into a significant amount of money, many former business owners express a desire to create a charitable foundation for a cause that’s always been near and dear to their hearts. With the funds now available, they may want to take a more active, strategic role in supporting outcomes with their philanthropic capital that have long-term impact

Considering family dynamics, it’s vital to plan well ahead of time. If philanthropy is your ultimate goal, set the tone and groundwork early—ideally five to 10 years before selling your business.

This proactive approach not only minimizes family conflict, it also makes the transition into philanthropy much easier. With the right advice in place well before a liquidity event, and by scaling up slowly, you’ll be better prepared to make large philanthropic investments.

Whether your goal is to keep, grow or give away your wealth, the key is to have a plan. That way, when the day after the sale of your business arrives, you’re not asking, “Now what?” Instead, you’re beginning a new adventure and asking more optimistically, “What now?”