Exiting a business is a significant milestone. One that often comes after years, if not decades, of hard work, dedication and personal investment.
While the sale of a business can be both financially rewarding and emotionally complex, it also marks the beginning of a new chapter: managing the wealth you’ve worked so hard to create.
At Raymond James, Ribble Valley, we understand that life after business isn’t just about safeguarding your financial future; it’s about defining what comes next. Wealth management is key to making the most of your business exit.
In our latest blog we discuss what to consider to ensure your wealth continues to work for you.
1. Reassess Your Financial Goals
Selling your business fundamentally changes your financial landscape. The first step after an exit is to reassess your financial goals to align with your new circumstances.
- Key Questions to Consider:
- What do you want your wealth to achieve?
- How has your risk tolerance changed now that your income no longer depends on the business?
- Are you planning to fully retire or are you considering new entrepreneurial projects?
Understanding your personal and financial priorities will form the main foundation of your post-exit wealth strategy.
2. Develop a Robust Investment Strategy
Following the sale, many business owners face the challenge of transitioning from an asset-rich, illiquid position to managing a significant cash influx. Developing an investment strategy that reflects your goals and risk appetite is critical.
- Key Considerations:
- Diversification: Unlike your business, where most of your wealth is tied to a single entity, your investment portfolio should spread risk across different asset classes and markets.
- Tax Efficiency: With recent changes to Capital Gains Tax (CGT) rates, strategic investment planning can help minimise tax liabilities.
- Income vs. Growth: Determine whether you need regular income from your investments or if you can focus on long-term capital growth.
At Raymond James, Ribble Valley, we can help create a tailored investment strategy to help you preserve and grow your wealth while managing risk effectively.
3. Tax Planning in the Post-Exit Landscape
The 2024 Autumn Budget introduced by Chancellor Rachel Reeves has significant implications for individuals managing newfound wealth after a business sale. Changes to CGT, as well as reforms to Business Property Relief (BPR) and Agricultural Property Relief (APR), could affect your long-term tax position.
- What You Should Do:
- Review your estate plan: Changes in BPR and APR may affect how efficiently you can pass on wealth.
- Utilise tax-efficient investment vehicles: Consider ISAs, pensions and other structures to optimise tax outcomes.
- Plan for inheritance tax (IHT): With potential changes on the horizon, proactive planning can help protect your family’s financial future.
Working with a financial advisor at Raymond James, Ribble Valley, ensures that your wealth is structured in the most tax-efficient way, both now and for future generations.
4. Consider Succession and Legacy Planning
For many business owners, the sale of their company is closely tied to personal legacy goals. Whether it’s providing for family, supporting charities or leaving an impact on your community, succession and legacy planning becomes a central focus after an exit.
- Legacy Planning Strategies:
- Trusts and Foundations: Protect and manage family wealth across generations.
- Philanthropy: Establish charitable foundations or donor-advised funds to support causes you’re passionate about.
- Gifting Strategies: Maximise tax allowances when transferring wealth to family members.
An effective legacy plan ensures your values are reflected in how your wealth is preserved and distributed.
- Lifestyle Planning: Beyond the Financials
Life after business isn’t just about managing money. It’s about rediscovering your purpose. Many former business owners face an unexpected void after stepping away from the daily demands of running a company.
- Ask Yourself:
- How will I spend my time meaningfully?
- What passions or interests have I put on hold that I can now explore?
- Do I want to mentor, invest or volunteer in my spare time?
Integrating lifestyle planning into your wealth management strategy helps ensure your financial resources support not just your needs, but your aspirations.
5. Build a Team of Trusted Advisers
Managing wealth post-exit requires more than just financial acumen. It demands a holistic approach that considers investments, tax, legal matters and personal goals. Surrounding yourself with a team of trusted advisers – including financial planners, investment managers, tax specialists and legal professionals, can provide the expertise needed to navigate this new phase with confidence.
At Raymond James, Ribble Valley, we offer bespoke wealth management services tailored to the unique needs of former business owners. We’re here to help you:
- Create a personalised financial roadmap
- Optimise your investment strategy
- Plan for tax efficiency and wealth transfer
- Support your personal and philanthropic goals
Closing Thoughts
Exiting your business is just the beginning of a new journey, with the right planning and expert advice, you can turn the proceeds of your business sale into a lasting legacy, financial security and personal fulfilment.
Are you ready to plan for life after business?
Contact Raymond James, Ribble Valley today to start a conversation about your future.
Risk warning: With investment, your capital is at risk. The information in this blog does not constitute advice or a recommendation, and you should not make any financial decisions based solely on it. If you require personalised advice, we will be happy to assist you.