3 Reasons to Talk with an Investment Advisor Before Selling Your Business

October 12, 2019 - 4 minutes read

Talk with an Investment Advisor Before Selling Your Business

Maybe it’s only crossed your mind. Maybe you haven’t told anyone yet. Or, maybe you’ve made it clear that the time is now (or quickly approaching) to sell your business.

If you have begun thinking about selling your business, don’t overlook the need to talk with a Registered Investment Advisor before you do. Registered Investment Advisors can provide you with expert guidance as you plan and transition to life after your business. They are bound by a fiduciary duty to always put the interest of the client above their own.

Selling a business can be a big event, and there are three specific reasons why talking with a Registered Investment Advisor before selling your business can be helpful for you:

1. You can get a better sense of what to expect. Investment Advisors’ clients often include those who have already sold businesses. They can help you know what to expect from the process, as well as life after the business. For example, a dentist looking to sell a successful practice has questions about creating income after the sale. Or, the owner of a manufacturing company has questions about what to do with the money he’ll receive from the sale. We’ve answered these questions already for other clients. We’d be happy to share these answers with you, too.

2. You can get a plan in place. Coming into a large sum or stream of money from a business sale can open up a new set of challenges. There may be temptation to splurge on luxury items or to take extended vacations. There may be pressure from others to “give back” too much – so much so that it ends up reducing too much of your principal. Celebrating your success and sharing with others are certainly good things. But talking with an Investment Advisor BEFORE the money hits your account can help establish a plan for what to do with the money so that the celebrations and giving back can happen without damaging your longer-term outlook.

3. You can put your new money to work for you. Investment Advisors can provide helpful advice on how to put the sale proceeds to work for you. After all, selling a business may involve a significant transition to make: From working for your money to making your money work for you. It is a different mindset. Conversations with an Investment Advisor before selling your business can provide clarity on what your money will do for you, when invested, and what kind of cash flow to expect from it.

Trusting Your Gut and Trusting Others

Many successful business owners have achieved their success by listening to their hearts and following their gut feelings. It may be difficult to let go and trust others. But you owe it to yourself and to your future success. Talk with an Investment Advisor before you sell the business.

To learn more, download our free eBook “The 3 Questions You Should Ask an Investment Advisor Before You Sell Your Business”.

Ned Karren is a Chartered Financial Analyst and a Registered Investment Advisor. He is a founding partner at KKRA, opening the firm in 1983. Ned earned a degree in Economics at BYU (1967) and an MBA degree from Northwestern University (1969). He is a portfolio manager and holds primary responsibility for the KKRA’s Growth Equity Strategy.

 

Tags: Selling Your Business