You’ve reached a pinnacle in your professional life by building and growing a successful business that is now attracting interest from buyers willing to pay hundreds of millions of dollars. While selling a financially successful business is a significant milestone, it often comes with challenges many entrepreneurs and founders don’t anticipate. The psychological impact and the loss of purpose can be profound, especially when the business has been central to your or your family’s identity for decades. Here are some common challenges that business owners encounter after selling a business.
Sense of Identity Loss
For many entrepreneurs and wealth creators, a business you founded is more than just a job—it’s an integral part of your identity. The daily routine, the authority in decision-making, and the sense of importance tied to running your business can be hard to replace. This loss may lead to feelings of emptiness, disorientation, or even depression as you grapple with questions such as “Who am I without the business?” and “What’s next?” Whether to retire, start a new business, or pursue philanthropic interests can also be daunting.
I encourage you to reflect on the leadership skills, professional attributes, and personal values contributing to your business success. Engaging in this worthwhile exercise, particularly after selling a company, will help you see where your strengths can be applied to new areas of life.
Sense of Unease with Wealth
Sometimes, entrepreneurs who sell a business and receive a huge financial windfall can feel anxious or develop a sense of unease or even guilt. They might have been very comfortable running a business, but having millions of dollars feels uncomfortable. People have often asked, “What did I do to deserve all this wealth?” (You built a great business, served customers well, and created a lot of jobs. That’s what.)
To manage these feelings, you can start by simply acknowledging them. It’s normal to feel a little out of your element. And don’t be afraid to talk to a professional about it. The more you can find a new normal for your emotions, the likelier you will find new purpose and comfort in your life and lifestyle in the future.
Future Endeavors and Finding New Passions
Not surprisingly, many entrepreneurs and business owners feel pressure to reinvest in new ventures, often out of habit or a desire to replicate past success. Slow down and use your time to explore what truly excites and motivates you now. Finding new passions or getting involved in activities like angel investing in startups, mentoring younger entrepreneurs, serving on an advisory or corporate board, or doing volunteer work might offer a satisfying level of engagement. Starting a foundation could also be a new focus, providing a rewarding way to use your money and expertise for the greater good.
Developing a legacy project is another way to find meaning after a business sale. Documenting the business’s history by writing a book, commissioning a video, or creating a family archive can help preserve its legacy and provide a sense of closure.
Family Dynamics and Expectations
Family dynamics can be challenging in any environment, especially when newfound wealth leads to misaligned expectations and strained relationships with family and friends. You may receive requests for money or perceive a change in how some people relate to you. Also, some family members may have different expectations regarding using the proceeds from the business sale, whether for lifestyle changes, investments, or charitable giving. Open and honest conversations with family members about financial goals, priorities, and values help align expectations and prevent hurt feelings and misunderstandings.
To alleviate potential strain, we often recommend creating ways to reconnect with friends or family who might have been sidelined during your busy business years. Hosting a multigenerational retreat for extended family or participating in formal networking events can help maintain social connections and create opportunities for new relationships.
Financial Adjustments & Reinvestment Pressure
Some people can be tempted to dramatically increase their lifestyle spending after a financial windfall. Transitioning from having a consistent business income to managing a large lump sum of money requires a shift in your financial mindset and investment strategy. Without proper wealth planning, even millions of dollars can disappear quickly, leading to financial instability.
To manage these adjustments, surround yourself with a team of professionals, including a financial advisor, tax specialist, and an estate planning attorney who can help you look ahead and come up with a long-term plan. Consider joining a multifamily office with these trusted professionals all under one roof. Together, these experts can help you make informed decisions about where and how to invest and protect your new level of wealth.
Stay Focused on the Positive
The sale of a company often triggers a mix of emotions. It marks the end of an era and can separate you from something that has been a significant part of your life. In some instances, the feelings that rise to the surface might even feel like you’re in mourning as you grieve the loss of something integral to your life and identity. You may even feel guilty or weird about having so many liquid assets. These emotions are all natural. Rather than pushing them aside, give yourself time and permission to experience them fully.
Focus on the positive outcomes of the sale and the new opportunities that will come. Reflecting on what the sale has enabled, such as financial security, more time with your family, and the chance to pursue new interests, can help shift your perspective and set yourself up for a fulfilling and prosperous future. Remember, the skills that made you successful in business can also serve you well in this next phase of your life.
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