Why Selling Your Business Won’t Solve Your Money Problems

The Double-Edged Sword of Selling a Business

Entrepreneurs work diligently to establish businesses that provide a robust income stream and develop an asset they hope to sell for a high price eventually. 

But here’s what I’ve noticed all too often: many business owners put in all that effort to create something sellable, only to be disappointed with the results. 

Many entrepreneurs go into business with the desire to work hard, play hard, and receive financial rewards.

Unfortunately, it often comes as a belated realisation that the high income they might have relished for decades can evaporate completely post-sale, leaving them confused about managing the lump sum they receive.

On top of that, without the business, many owners face a loss of purpose and direction, coupled with a sense of financial insecurity.  

It brings them to a challenging position where they feel unenthusiastic to start again, and their runway to financial independence seems relatively short.

An Alternative Approach: Building Your Exit Ramp Early

The opportunity here lies in proactively leveraging your premium income before the sale, building your exit ramp to financial independence. 

In this context, the business sale becomes an extra benefit rather than a critical lifeline to reaching financial goals.

To illustrate this, let’s look at one of my clients’ experiences. 

They run a successful regional business known for being the best in its industry. 

They could sell the business at a high price today, but there’s significant uncertainty about managing the lump sum and sustaining their lifestyle without a consistent income.

Like this client, many business owners deal with a mix of emotions, pushing themselves too hard and ending up feeling disillusioned.

While it may seem like a unique scenario, it’s, unfortunately, a common story.

Why Selling Your Business Isn’t Always a Win 

According to a fascinating report by the AES Nation Group, it turns out that a lot of business owners want to sell their businesses. In fact, nine out of ten express interest in doing so.  

But what’s disheartening is that only five out of ten business owners are happy with their sales results.

More than 50% reported dissatisfaction with the financial outcomes after selling their businesses. 

Out of the group surveyed, only around 35% felt somewhat satisfied, and a mere 12% reported being highly satisfied. This shows that business owners’ chances of achieving a successful sale and being satisfied with the results are quite low.

Three Critical Steps of a Winning Strategy

So how do you tip the odds in your favour? 

Here are three things to consider if you’re a business owner, especially if you don’t want to rely solely on your business sale to achieve your financial goals: 

• Achieve Financial Independence Before Selling: Start thinking about investing outside your business as early as possible. While your business might yield a high ROI, you need to start building your investable capital in other assets that grow over time or deliver cash flow.

• Focus on Income Streams Outside Your Business: As you approach the sale of your business, shift your focus from growth to income. Unless you’re an experienced investor with large capital, traditional assets such as property or shares might not provide the desired results. You need to think outside the box and consider alternative investments backed by real property for predictable, sustainable cash flow.

• Leverage Your Time and Resources: Decide whether you want to go through this journey alone or with guidance. Finding the best investment opportunities and learning to manage them efficiently can take time, which you might not have if you’re running a successful business. Engaging a trusted financial mentor can save time and help you navigate the process more smoothly. 

To summarise our conversation, the odds are stacked against you that your business sale will deliver you the financial independence you might hope it does.  

So I am interested in creating a mission to help business owners seeking financial independence who don’t need to rely on that cash lump sum from business sales to live a life where they can have the impact they want.