As a business owner thinking of selling, it could be that you’re focusing purely on the financial benefits of having a plan in place before you start the process.
However, the emotional benefits could prove to be just as important. Selling your business can often feel like much more than a simple financial transaction, as your company is intrinsically linked to many areas of your life.
In fact, research from Arbuthnot Latham (6 February 2025) showed that 52% of business owners felt anxious about their future exit.
Read on to discover how creating a strong financial plan could help you to emotionally prepare for selling your business, as well as smooth the way financially.
Your sense of identity often goes hand in hand with your role as a business owner
Owning your own business is often directly linked to a feeling of status and achievement, particularly if you’ve built your business up from scratch.
Which is why having a strong financial plan in place can support your wellbeing, as well as your bank balance. Shifting from being a business owner with a clear sense of purpose to a life of leisure, or one with no clear post-exit plan, can be a difficult experience to navigate.
Reporting on the toll of UK business exits, the Arbuthnot Latham research highlights that planning ahead made the transition much easier post-exit, with 61% of business owners feeling completely or mostly prepared for life after the sale.
However, 39% of people felt only somewhat prepared and reported feelings of aimlessness and uncertainty.
If your sense of identity is strongly tied up in your business, then your financial plan can give you a more realistic idea of what lies ahead, in turn removing feelings of loss or panic about the future.
A financial planner will look at your life beyond your wealth, seeking to understand what you find fulfilling, what would give meaning to your life, and how you want to approach the next chapter.
Many use a process called “cashflow modelling”, which uses software to test a wide range of different scenarios and how they could look for you. Though the outcomes of a cashflow model cannot be guaranteed, it can often offer you some reassurance that things aren’t coming to an end, but rather that you’re taking a step in a different direction.
Your financial plan can even help to unlock a new sense of identity, rather than leaving you feeling adrift.
Loss of routine and structure can create a fear of “what comes next?”
Running a business means most days are extremely busy. You’re making decisions, solving problems, conducting meetings, and taking responsibility for all of your organisation’s activity.
While the idea of not being quite so busy can be a tempting one, it can also feel overwhelming to think about what will happen next.
Your financial plan can help to alleviate some of these fears by developing:
- A clear income strategy for the next stage of your life, such as pensions and investments
- Scenario modelling to show how your wealth would look if you start another venture
- Ideas for how part-time working could help you keep some routine.
Essentially, it can help to turn your vague worries into measurable outcomes, which in turn helps you to make data-driven, informed decisions.
Worrying about managing your long-term finances can lead to emotional decision-making
Selling your business can mean a step change from managing company finances to suddenly dealing with the sale proceeds as your personal assets.
Your financial planner can help you devise a long-term strategy which takes away the worry of managing a large lump sum by yourself. This can include:
- Tax-efficient use of your sale proceeds
- An investment strategy that aligns with your lifestyle goals and attitude to risk
- A sustainable income withdrawal strategy.
Coupled with regular reviews to account for any changes in your circumstances, this can help to create a sense of stability and reassurance. You’re less likely to make overly emotional decisions, such as panic investing, and equally can shift away from an overly cautious approach.
Effective planning can show you what possibilities are open to you post-sale
You may be planning to retire once you’ve sold your business. Alternatively, you might be thinking about a new venture or a different opportunity. Without a plan, this can feel like an intangible dream, or a series of “what ifs?”.
Your plan can give you a clear sense of what could be financially possible, such as philanthropy or angel investing. It can also show you how a new type of role could work out, for example, sitting on a board or acting as a mentor or advisor.
Having this roadmap of possibilities can give you the confidence to try something new without the associated worry of wondering if you’re doing the “right” thing.
Get in touch
If you’d like to understand more about how a financial plan can help with your wellbeing as well as your wealth, please talk to us today.
Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
The Financial Conduct Authority does not regulate estate planning, tax planning or cashflow modelling.
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