You did it. You just crossed the finish line of the longest, hardest race you’ve ever run. Probably the most fulfilling, too. There is a line of people like me around the corner offering you a whole host of products and services. It’s easy to say “yes.”  Below are the things you should say “no” to, at least for your first year out of the business. 

 Do not:

Move

When you stop working, you lose your identity. When people ask what you do at a cocktail party, you can no longer say “I run XYZ Corp.” You lose your structure. Your spouse may be telling you to get out of bed, but you no longer answer to the alarm clock and the Outlook calendar invites. You lose a large part of your social network that was built in through the business. My point is that next to having your first kid, or losing a spouse, it’s hard to imagine a more dramatic overnight life change. 

 You may be living where you live because that’s where the business is. You are no longer tied to it. But it is where your social network is. It is where your doctors are. And likely, it is where at least some of your kids are. Try to minimize unnecessary change in this first year. Try to keep being who you were and spending time with the same people you have for all these years. The beach house can wait (at least for a little).  

Dive into the market 

Transactions volume and valuations are cyclical, though it does seem like we’ve been in a good cycle for a long time. If it’s a good time to sell your business, the economy is also likely in a good spot, but you never know how long that will last.  

A business that I was a minority owner in sold in December 2024. The economy was hot. The price tag was high. Fast-forward a few months and the S&P was in a nose-dive. If you took the business proceeds and rolled them directly into the public markets, you just lost 20% of the valuation. Of course, things eventually come back, but it is often prudent to move large lump sums into the market over time, particularly when managing sequence and timing risk.

For an owner who is selling their business so that they can retire, it would be common for us to advise reinvesting across an entire year. Made $10 million after taxes? Put $800,000 per month into a portfolio you are comfortable with over 12 months.   

Allocate a significant amount to private investments 

Many of the deals that are happening today are funded with private equity money. And many of those private equity deals will include at least some component of private stock. So you may already have too much money tied up in the small, illiquid companies that make up the private equity company’s portfolio.  

Private investments are exploding in the wealth management space. Having access to these deals used to be a differentiator for a firm like mine. While this may still be true to an extent, the general trend is that minimums have been coming down, while fees have been going up. Your neighborhood advisor is now offering you these “private” investments in a mutual fund wrapper.  

You made your money in a small private business. It worked. It makes sense to think it will work again. The reality is that private investments take a different level of due diligence and almost always come with higher fees and less liquidity. I’d give it some time before tying up your money again. 

Start another business 

You started, scaled, and exited a business. Confidence is high, and recency bias is real. Most of our clients who exited businesses did so in order to retire, but many younger owners let the momentum of a sale carry them into the next venture. My advice: Pump the breaks.   

A big part of whether you should start another venture at all depends on where you are in life and whether you need the money. We rely on financial planning software (ideally pre-sale) to make this determination.  

Likely, part of what made you succeed the first time around was a lack of money. When you have no money, failure is not an option. In this situation, you grind, iterate and pivot until you find a profitable path.  If you are in a position where money is no longer the primary driver, you’re less likely to grind, iterate or pivot. It could end up being a hard way to lose a lot of money.  

Do anything until you know your tax bill 

The structure of a business sale and your basis in the business largely determine the taxation.  You should seek tax advice prior to negotiations in order to make sure the sale is structured in the most efficient way possible. Even with all of this, the actual tax bill is a bit of an unknown until you get the figure from your accountant. Just as it would be irresponsible during your working years to spend your income before paying your quarterly taxes, it would be irresponsible to spend large chunks of money before you know how much Uncle Sam owns. 

As mentioned earlier, there will be no shortage of advisors soliciting your business once that money comes in. But in my opinion, the best advisors to help you after the sale can also help you during the sale. They are the folks who have the resources to not only build a portfolio for you, but to help advise you on the tax, estate and planning consequences of a sale. 

This article is provided for informational and educational purposes only and should not be construed as investment, tax, or legal advice, or as a recommendation regarding any particular strategy. Whether a Roth conversion is appropriate depends on an individual’s financial circumstances, tax situation, investment objectives, and applicable law. Tax laws are subject to change and their application may vary. Examples discussed are hypothetical and are intended solely to illustrate general planning concepts. They do not reflect the experience of any specific client or guarantee future results. Consult your financial, tax, and legal advisors before implementing any strategy.