'I sold my company, now what?' A frequently asked and logical question. As an entrepreneur you have invested in your company for years. When you have sold it, you are in a new position: you have time and money left and you are looking for a new interpretation of your daily life. Of course you are also looking for a way to organize the sales proceeds in a smart way. But what are the options? What options do you have after selling your business? Whether you have already completed the sale and are ready for the next step, or you are still exploring the possibilities after a possible sale, in this article we will inform you about the possibilities after your exit.
First of all, it is of course good to look at your personal situation. The way in which you get off (or have got off) can determine your next step. It is therefore important that you are well aware of the different situations, because not every sale has to mean that you have lost your 'child'. There are several ways to sell your business. If you are still in the orientation phase, think about your ambitions now. Do you want to stop altogether, or do you want to stay involved with the company? To help you find your way around, we explain the three sales options, including a multitude of options that you have after the transaction.
Three ways to sell your business
Of course, selling your business can happen in many different ways. Yet there are three ways that often play a role in your choice.
Option 1: Complete Exit
The name says it all, with a full exit you leave the company completely. There are several reasons why you would want this. Most entrepreneurs opt for this option when they have (nearly) reached retirement age or are ready for a new challenge. It is therefore logical that if you aspire to a full exit you want to sell as quickly as possible.
Keep in mind that selling your company does not happen overnight, especially when you are the face of your company. Take the time in advance to distance yourself so that you, as it were, separate yourself from the organization and you as the figurehead of the image. Aren't you doing this? Then you can count on a (much) lower price. If your company is too dependent on you, this is a greater risk for a potential buyer. After all, it remains to be seen whether the staff, customers or partners will also leave after you leave. So make sure you think carefully about your position within your company at the time of exiting. This will take some time, but will ultimately give you a higher score selling price than if you sell directly.
Option 2: Temporary stay on the basis of an earn-out
The second option you can choose is to stay on temporarily. This is also often what a buyer enforces in the form of an earn-out, or delayed exit. You stay here for a (often defined) period and receive part of the sales price immediately after the sale. During the period that you stay with the company, you contribute to the goals that were part of your business plan. A buyer always steps in based on growth potential. When you and the new owner have achieved the desired results after this period, you will receive the remaining part of the sales price. The advantage of this way of exiting is that you immediately receive an amount in your account and that you remain connected to the company you have built. However, an earn-out also has disadvantages: there is no time to recover, because you have to keep going to really achieve your goals and thus earn your earn-out. In addition, you lose control and many entrepreneurs get the feeling that they are employed again, which they experience as suffocating. As an entrepreneur, you value your freedom. The chance of this feeling is greater when your company is taken over by a party that is larger than your company. The political arena there is bigger than what you are probably used to. Therefore, make good agreements in advance about your freedom of movement during the period that you will stay on. Yet the earn out option a common way of selling, largely for strategic reasons. The buyer needs the original entrepreneur in order to realize the ambitions for the company.
Option 3: Reinvest in the 'new' company
A final opportunity to sell your company is that you have the sells shares and immediately reinvests (part of) the acquired capital in the 'new' organisation. Especially when you sell the company to a strategic buyer or private equity party, then a large war chest often becomes available in one fell swoop and a lot of growth is possible. When you choose this option, make sure you choose a strategic partner that you know how they stand and what their growth ambitions are. Do they have a buy-and-build strategy, do they want to grow autonomously or do they have other plans? Always do one due diligence investigation so that you know who you are doing business with, but also whether you click with your new shareholders. The advantage of reinvesting is that after the sale of (part of) your company you can immediately monetize part of it. We often see that entrepreneurs create financial peace with this. You reinvest the other part. Although you acquire a smaller percentage, it is often part of a much larger pie.
Now that you know what sales options are available, you can start thinking about the next step. Why already? Of course you want to put your assets away as smartly as possible. Make sure you have a plan to save your money smartly, or even increase it without facing nasty tax surprises. We would like to present you with some options, so that you can also think about them in advance.
Your company sold, now what? We list 7 options for you
Yes, we'll call him anyway. You can indeed put your money in the bank, but we really advise against this. You used to be able to retire… Unfortunately, that is no longer the case nowadays, but you pay interest on your assets and it loses value due to inflation. There are plenty of other ways to set your money aside or even make it work for you. Think: how can I put my money away in a smart way so that I earn something every year? The option of saving causes you to lose on it. So don't.
2. Investing in real estate
Why investing in real estate? It is a tangible investment with optimal returns, you are protected against inflation and you have many tax benefits.
3. Investing (cryptocurrencies, stocks, etc.)
With investing you can build a high return in a short time. Your investment can quickly become worth a lot of money. Please note: investing is not without risks: you can also lose your entire investment. Be well informed and, of course, only invest with money that you can afford to lose.
4. Start a new business
Many entrepreneurs cannot resist starting a new business. They see opportunities and know how to respond to them. The advantage: you take all lessons learned from the past with you so that you can grow quickly.
5. Become an Angel Investor
Is entrepreneurship dear to you, but you don't want to start again? Then you can join as angel investor. You invest your time and knowledge in existing companies to achieve rapid growth. There are various groups you can join, for example to invest together. Be aware of the risks as an angel investor, know what you are investing in so as not to be cheated
6. Coach role: keep spreading knowledge
There are entrepreneurs who want to spread their lessons learned and knowledge and step into a coaching role to help other entrepreneurs with their challenges. Founder of No Monkey Business, Martijn van der Hoeden is a good example of that. He sold his successful tech company and today helps other entrepreneurs ENGrows. You too can help other entrepreneurs as a coach.
And of course.. also enjoy!
Perhaps superfluous, but still worth mentioning: First enjoy yourself after selling your company. Clear your head and do what you've always wanted to do: go on a world trip, buy that one car. Do what makes you happy, because let's not forget: it sell company in which you have invested time, money and energy day in day out for years is simply a grieving process: you say goodbye to your 'child'.
So take the time to relax and enjoy what you have now. Everything else is always possible.