I Sold My Business … Now What?
The rich cash infusion that comes from selling a business can create a liquidity conundrum that's a challenge to manage.


America is full of innovators, disrupters and entrepreneurs. The opportunity to start a business has never been greater, and according to the Small Business Administration (SBA), 44% of economic activity is from small business. In fact, much of the wealth we see in the wealth management industry is created from the eventual exit (via sale or IPO) of these businesses. For the average person the sale or IPO of a business may seem like a dream come true, but it does not come without its share of changes and considerations.
Fortunately, there have been many others who have traversed the landscape of business sales. In fact, there are wealth management firms that work specifically with this type of client. Finding a specialist that employs Certified Exit Planning Advisors (CEPA), Certified Private Wealth Advisors (CPWA) and Wealth Strategists is a good start. These financial professionals can help guide you through your post-sale decision-making process.
In my experience, the newly created liquidity from a business sale or IPO comes with the following three questions:
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Question #1: How do I maintain my standard of living?
I have traded my income from my business for large infusion of cash. How do I maintain my standard of living while ensuring there are sufficient funds for the rest of my life and possibly future generations? The relief that comes with mapping out your financial future in the form of a financial plan is never more acute than in this situation. Replacing fear and speculation with data is paramount in reducing the anxiety associated with an unknown financial future. From this planning exercise, your practitioner will guide you through identifying, “what it takes for you to keep being you,” from a cash-flow perspective. This will inform the appropriate investment strategy to make sure your goals are attainable and sustainable.
Question #2: What about taxes?
How do I mitigate the potentially enormous tax bill that comes along with realizing a business transaction? This is where the CEPA® and CPWA® practitioners and of course a CPA will come in handy. Every transaction is different as are the tax implications. Is it an asset sale or a stock sale? Is there QSBS (section 1202) stock involved? Is there an earn-out? What happens if I roll my stock into acquiring company stock?
As you can see, this question is multi-faceted and the structure of the deal will play the biggest part in determining the tax implications. For those charitably inclined, there may be some additional options to reduce taxes such as a donor-advised fund or charitable lead trusts, but a thorough plan is required to consider whether these are viable options.
Question #3: What do I need to talk about with my family?
What kind of conversations should I be having with my significant others and our children who now understand the level of wealth created by this sale? On its surface, this may seem like an odd question. However, when you consider that 70% of family wealth does not make it to second generation, and 90% does not make it to the third generation according to Nasdaq, the importance becomes apparent. This is more than an estate planning conversation (here is a good checklist for getting started with that). Think, “the softer side of estate planning.” These family governance conversations include family values discussions and revolve around the vision you have for the legacy you are creating. Having a skilled family governance professional to navigate these conversations is key in engaging the next generations in what could otherwise be an awkward and uncomfortable discussion.
Congratulations on the realization of your hard work into a potentially life-changing business transaction. You have reached an enviable position, and now have the means to shape your destiny. While by no means simple, the reality is that there are professionals who can guide you through this new phase of your life. Engaging these professionals early in the process is always a smart move.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Chris Creed is a Senior Lead Adviser for Venturi Wealth Management. Chris partners with new clients to organize, plan and manage all aspects of their family's financial life. As a Certified Financial Planner® professional and a Certified Private Wealth Advisor®, Chris creates customized wealth planning strategies unique to highly affluent clients.
-
Is Trump's Tax Plan Speeding Up the Looming Social Security Funding Crisis?
Social Security Social Security's combined retirement funds are running out of cash, and its insolvency date is expected to occur in less than a decade.
-
How to Keep Your Work Friends After You Retire
Work friendships can boost teamwork, lift your spirits, and make the job more fun. But when you retire, these friendships can fade. Here's a look at why that happens and what you can do about it.
-
Here's Why Munis Aren't Just for Wealthy Investors Now
Buyers of all levels should be intrigued by municipal bonds' steep yield curve, strong credit fundamentals and yield levels offering an income buffer.
-
I'm a Financial Planning Pro: Do Your Family a Final Favor and Write Them a Love Letter
Specify your preferences in this personal document that shares your wishes on how you want to be remembered and celebrated. Your family will thank you for easing an emotional time.
-
The Future of Financial Advice Is Human: Gen Z Trusts Advisers, But AI Skills Matter
Graduates entering the workforce trust human advisers more than AI tools with their financial planning. But AI can still enhance the client/adviser relationship.
-
I'm a Wealth Adviser: If You're a DIY Investor, Don't Make These Five Mistakes
Even though you may feel confident because of easy access to investing information, you may be making mistakes that could compromise your long-term performance. Here's what you should know.
-
Building a Business That Lasts: The Critical Steps to Avoid Blunders
'Another Way' author David Whorton offers advice on how to build an 'evergreen' business that endures by avoiding common pitfalls that can lead to failure.
-
I'm a Financial Pro: Why You Shouldn't Put All Your Eggs in the Company Stock Basket
Limit exposure to your employer's stock, sell it periodically and maintain portfolio diversification to protect your wealth from unexpected events.
-
How Will the One Big Beautiful Bill Shape Your Legacy?
The One Big Beautiful Bill Act removes uncertainty over tax brackets and estate tax. Families should take time to review estate plans to take full advantage.
-
Should You Claim Social Security Early or Late? A Financial Adviser Weighs In
There isn't a wrong age to start claiming Social Security, but there are factors that everyone should consider to avoid leaving money on the table.