What should I do with the money after selling my business?

You sold the business. You do not need to immediately invest all the money.

After a major business sale, there can be pressure to figure out what comes next. Where should I invest it? How much should stay in cash? How much can I spend? What may be owed in taxes? Can I retire? Should I buy real estate? Should I pay off debt?

Before we answer those questions individually, I want to understand something bigger: What does this money need to make possible for the rest of your life?

For years, your business probably had a capital allocation strategy. Now you need one.

What should I do first after selling my business?

My first priority usually isn't finding the highest returning investment. It's getting organized.

How much did you actually receive? What obligations remain? Are any proceeds tied to an earnout, escrow or future payment? What major purchases or commitments are coming? How much liquidity would make you comfortable? Most importantly, which decisions actually need to be made today?

Sometimes the first job for your money is simply buying you time to make good decisions.

How much of the proceeds should I keep in cash?

There isn't a percentage I can give every business owner. But we can figure out a number for you.

One owner receiving $5 million may have another source of income, modest spending needs and no major purchases planned. Another may be buying a home, starting another company and expecting significant obligations. Their liquidity needs could be dramatically different.

Same $5 million. Different lives. Different answer.

How should I invest money from the sale of my business?

I resist treating the proceeds as one giant investment account. Some may need to remain liquid. Some may need protection. Some may be positioned for longer term growth. Some may eventually generate income. Some may have a tax purpose. Some may be intended for family or charitable giving.

The objective isn't to find the best investment for the proceeds. It's to build the right strategy for all the different things those proceeds now need to accomplish.

How much can I spend after selling my business?

Can you buy the vacation home? Travel more? Help your kids? Never work again? Start another company? The answer depends on more than the size of the check.

I want to understand your existing assets, spending, age, future income, taxes, investment strategy and what you want the money to accomplish over your lifetime. Then we can ask: What can I comfortably do with this wealth without jeopardizing the things that matter more?

What taxes should I plan for after selling my business?

Don't assume the amount in your bank account is all yours to allocate yet. The tax consequences of a business sale can depend on the structure and facts of the transaction.

This is where I want your CPA or tax attorney involved. I can help coordinate the wealth strategy around the transaction while your tax professionals determine the tax consequences.

Should I pay off debt after selling my business?

Maybe. If paying off a mortgage lets you sleep better every night, that matters. If keeping a low cost loan allows capital to accomplish something more important elsewhere, that matters too.

The mathematically optimal decision and the personally optimal decision aren't always identical.

What if I want to start another business?

Great. Let's make sure you don't accidentally put your entire financial future back into one company again.

I'm not automatically going to tell an entrepreneur how much is too much. But I am going to ask what happens if that capital goes to zero, what remains, what your family needs and whether the opportunity justifies the concentration.

I'm not trying to stop you from taking risk. I want us to understand the risk you're choosing to take.

Do I need a financial advisor after selling my business?

Not everyone who sells a business needs a financial advisor. But a large liquidity event can create interconnected decisions involving investments, taxes, cash flow, retirement, estate planning, insurance and family wealth.

The value of good advice isn't simply choosing investments. It's making sure all of those decisions are working together.

That's the role I want to play. When we need tax, legal or insurance expertise, I want those professionals involved too. You shouldn't need five different strategies for the same pile of money.

Questions to ask after selling a business

1. How much of the proceeds are actually available after taxes and other obligations?
2. How much liquidity do I need over the next few years?
3. How much can I comfortably spend?
4. What income does my portfolio eventually need to produce?
5. How much risk do I need to take?
6. How much risk do I actually want to take?
7. Do I want to invest in another business?
8. What do I want to give to my family or charity?
9. What does this money ultimately need to make possible?

You need a personal capital allocation plan

For years, you made decisions about where your company's next dollar should go. After selling the business, the decisions haven't disappeared. The balance sheet just changed.

That's what I mean by Capital Clarity.

You spent years learning how to allocate capital for your business. Now let's build a capital allocation strategy for you.