Selling a Business: Effective Financial Planning Pre & Post Business Sale

Selling a Business

What to do when you’re selling a business

If you’re thinking of either raising finance or selling a business, you’re exposed to a myriad of unexpected pitfalls. But just as you wouldn’t start a business without a plan, having a plan to raise capital is essential. Daniel Wood and Matt Finch of 7IM explain why a meticulously planned and crafted strategy should live alongside any other high-priority strategies you might have for your business.

A business usually starts as an idea and revolves around plans focused on growth. As these plans materialise during the lifecycle of a business, so do certain milestones that define the life of a business owner.

At every step of the way, being fairly rewarded for your efforts should be top of the priority list. And just as a poorly planned capital raise or business sale can fail to do justice to your hard work and dedication, inadequate or late financial planning could have a detrimental impact on your future ambitions.

But that sometimes is hard to focus on, because when you’re focused on growing your business, there is so much to look after. Prioritising tasks to see the business flourish often leads to neglecting tasks that impact your personal life, such as building a personal financial plan, pre and post capital raise or business sale.

Engage with an expert

The best strategy to prepare for any eventuality is to team up with a specialist who understands your passion and can partner with you to help implement a structured personal financial plan.

This is what a financial planner does. Even if selling a business looks to be far in the future, expertise and experience in this area can help ensure your personal finances are structured efficiently to meet your short, medium, and longer-term personal objectives alongside a tax optimisation strategy. Over time, an optimised financial plan based around your needs and preferences, however complex, will hold you in good stead as you navigate the many challenges you encounter along the journey.

A financial planner understands that your life can change significantly once you enter the next phase of growth or sell your business, and they are always in your corner as you confront the highs and lows facing you.

Selling a business – Key Areas:

  • Building the financial foundations: As you enter the next stage of your business’ growth, identifying how you can protect and preserve the things that are important to you and your family should the worst happen. Let’s call this area disaster management!
  • Rates and reliefs: Making sure you’re putting yourself in the most tax-efficient position when planning your next move, using your allowances for both personal and business benefits.
  • Post exit planning: Taking proceeds from the business sale efficiently so that you can sustain your desired lifestyle when you exit and tying in your specific objections on legacy planning for future generations, should this be an area of interest.
  • Keeping the business close: If you’d like to keep the business in the family, a strong succession plan can help streamline the transition and help you understand the conversations you should have to make this happen.
  • Other areas: Is your cash in the bank protected and benefitting from the best rates? Are you getting the most out of your money when converting between currencies? Financial planners tie all elements of your personal finances together coherently.

The exact details of your plan when selling a business should be much more comprehensive than the bullet points above. Speaking to an expert will help you refine your personal and professional goals and enable you to stress-test the scenarios around your range of ambitions, so you can thrive – and not just survive – over the long term.

As a business owner you may feel like your business controls your life. But the last thing you want is for your business to control your decision-making during the selling process, which could be pivotal in shaping the rest of your life. 

The best sales strategy will revolve around what is best for you, your family and your business. Working with a financial planner alongside your other professional experts to achieve your long-term plans will enable you to avoid the worst possible scenario: an encounter with the unexpected.

7IM works in partnership with entrepreneurs, investors and their families to help them achieve their financial aspirations, protect their wealth and plan for the future… whether it involves selling a business or not!  Feel free to reach out to for a free initial conversation.

Author: Dan Wood & Matt Finch – Private Clients, 7IM

This piece is intended for educational purposes only and does not constitute financial or investment advice. Tax rules are subject to change and taxation will vary depending on individual circumstances.