After selling my companies in the spring of 2022, Emilly and I have encountered many changes. As a business owner, selling your business is one of the biggest moments of your life. But it’s also a significant change for your spouse. If you’ve never gone through the process, you might think that closing the deal means that you’ve made it. You’re free to spend the rest of your days lounging on a beach with an umbrella drink in hand. That might be the case for a select few, but the reality is that, together, you will reach some surprising realizations. So, with today’s entry, I’m going to discuss what you and your spouse should expect after selling your business.
Follow Along With The Financially Simple Podcast!
This week on The Financially Simple Podcast:
(1:30) Burdens carried by our significant others
(2:49) The question
(4:34) There are rewards to selling your business
(6:50) The emotional toll of selling a business
(9:15) The link between business owners and their companies
(11:01) How do you prepare for life after the sale?
(13:01) Learning to live with your significant other… again
(14:53) Give like no one else
Selling Your Business: What to Expect
After selling your business, you can expect to have some freedom that you didn’t previously enjoy. Rather than spending sleepless nights worrying about team members, client turnover, competitors, and vendors, you can rest well, knowing that weight has been lifted from your shoulders.
Likewise, selling a business provides a financial boost that could be used to launch your next entrepreneurial pursuit, fund your retirement, or travel to all of the places you’ve always dreamed about visiting. Regardless of why you’ve sold your business, you will likely find yourself with more time and money on your hands than you ever did while operating your business.
In fact, reclaimed time might be one of the greatest rewards of selling a business. Think about all the birthdays, nights, weekends, and life milestones you’ve sacrificed for the sake of growing your business. After selling your business, you might be looking forward to “making up for lost time” more than anything else.
Additionally, after the sale, you could find more opportunities open to you. Many entrepreneurs find themselves in a position to take advantage of opportunities they didn’t previously have time for. For example, Richard Branson sold Virgin Records to EMI and was able to leverage the time and financial resources he gained to expand his other enterprises, Virgin Atlantic Airways, Virgin Mobile, and Virgin Galactic. However, what Emily and I have come to realize is that although selling a business might bring many wonderful rewards, it also leads to some startling realizations.
Some Startling Realizations
Regardless of how involved your spouse or significant other is in the business, having a connection to you is enough for the sale to affect them. It’s enough to create worry, excitement, angst, stress, and so on. You see, Emily wasn’t very involved in my business until we reached a period of rapid growth. At that point, she became involved for about a year. However, we had to get her out of the company as quickly as possible because it began to increase her personal stress level and affect our family.
Friends, even though her time in the business was relatively short, Emily has always been the company. She’s seen me at my most vulnerable. Oftentimes, she’s pushed me in ways that I didn’t want to be pushed. Likewise, she’s been my biggest supporter through it all. If you’re being honest, you could probably look at your own significant other and see the same thing. All of this weighs on their emotions. So, there will be some startling realizations made by both of you.
Learning to Live With Each Other
It may sound funny to say, but after the sale of my companies, Emily and I had a period of time where we had to learn to live with each other. Of course, we always shared the same home. But, as a business owner, you’re often at your business more than you’re at home. Therefore, we had an adjustment period where we had to get used to being in the same space at the same time. So, what did we do?
Before the sale, I began taking some time to be alone with Emily. We took a few weekend trips and just worked to rekindle our love and make up for lost time. Sometimes, we would go shopping. Emily loves to shop (even though she rarely makes a purchase). We would go to her favorite stores and spend a few hours just talking while she went through all the racks. It didn’t matter what we were doing. The point was simply to become used to being around each other for extended lengths of time.
The Emotional Fallout of Selling a Business
Going back to Richard Branson’s story, after telling his team that he had sold Virgin Records for $1 billion, he returned to his London home with “tears streaming down (his) face.” I know what you might be thinking, but friends, let me tell you, they weren’t tears of joy. You see, the Exit Planning Institute (EPI) reports that over 75% of business owners experience profound regret within 12 months of selling their businesses.
When people ask me about my own recent sale, they’re often shocked by my answer. You see, while I don’t regret selling my companies, there’s a sense of loss that I can only compare to the loss of a child. You might be thinking, “Justin, that’s a little dramatic.” I understand why you might think that. However, science supports my statement.
Entrepreneurs Are Deeply Connected to Their Businesses
Researchers at the University of Helsinki in Finland conducted a study using advanced MRI technology. They tested a group of fathers and a group of entrepreneurs. The fathers were shown pictures of their children and the entrepreneurs were shown images of their businesses. Their research found that the caudate nucleus, the portion of the brain linked to emotional processing and reward-seeking of both groups, “lit up” in a nearly identical fashion when exposed to their respective images.
You see, you’ve spent the past 10, 15, 20 years, or more, pouring everything you have into your business. It’s filled with memories, blood, sweat, and tears. Once you’ve sold it, it’s gone. You might be stuck in a position of trying to figure out what’s next. Where do you go from here? Chances are, a good part of your identity—if not all of it—is tied to being the owner of your business. Once that’s gone, many entrepreneurs struggle to understand who they are outside of their companies.
While I have greatly enjoyed what I’m doing since selling my companies, there’s a part of me that died. And if you’ve ever sold a business, you likely know exactly what I mean.
At a Loss for Words
A dear friend of mine is going through this process and is writing a book on the emotions of selling a business. He told me, “Justin, I cannot put into words what I’m feeling.” I understand exactly what he means. I’ve tried to express these emotions, but anytime I do, it feels as though I’m complaining or being an ingrate.
Folks, this is a very lonely position to be in. Most people have a difficult time empathizing with someone who’s just received a major windfall. As a result, business owners are often left to deal with their emotions on their own.
What Can You Do About It?
So, what can you do to ensure that you’re prepared for life after a sale? First, work with a tax planner to help you navigate the complexities that come with receiving such a large windfall. You want the money to last and working with a competent—and forward-thinking—tax planner can help you to categorize each asset as inventory properly, capital assets, depreciable assets, or real property. Additionally, a great tax planner can help you do this in as efficient a manner as possible, finding ways to limit your tax liabilities both for now and in the future.
Have a Plan
Next, you can mitigate some of the identity crises and feelings of loss or regret by developing a written plan for how to spend your time in the first year following a sale. Some ideas include:
- Working on personal development by learning a new skill. You could take up woodworking or learn a new language. The point is to remain busy while challenging yourself.
- Look for investment opportunities. You could find satisfaction in becoming an Angel Investor and helping other small business owners realize their dreams.
- Join a community or peer group to expand your network and develop relationships that aren’t directly tied to your business.
Having a plan for the time immediately following your sale will help provide some much-needed structure and direction while you’re adjusting to life outside of your business.
Get Away, Reconnect, and Don’t Go It Alone
In addition to working with a tax planner and creating a plan for your first year following the sale, you could choose to take an extended vacation with your family. According to a survey by the National Federation of Independent Business (NFIB), 71% of business owners take less than 10 vacation days per year.
Finally, don’t go through this journey alone! Having a coach or trusted advisor who has walked down this road before, can be the difference between a transition that leaves you feeling satisfied with what you’ve accomplished and spiraling into an abyss of depression and regret.
Friends, selling your business is one of the most exhilarating things you can do, as a business owner. However, it can often come with some unexpected realizations for you and your spouse. Successfully navigating a business sale is complicated. Making your way through what comes next can be a long and challenging journey. Don’t do it alone, and don’t forget that there’s someone very important going through this change with you. Working with a coach that has been through the process before, can help you have a much easier transition.
I know life is hard. But, my friends, life is good. It truly is. Coming to these surprising realizations after selling your business can be frustrating, but it doesn’t have to be. By making a plan and working with people who have been in your shoes, you can at least make it financially simple. Let’s go out and make it a great day!
If you’re working through an exit plan, or considering selling your business at some point in the future, reach out to our team. We have professionals who have been through this process before. Let us help you ease the transition.