A colleague retired from a biotech company after a decade of leading it to incredible growth. He cashed out with a substantial amount of money. After all the retirement accolades and hoopla died down, he found himself sitting in his home office one morning, alone, with a blank piece of paper on his desk. He looked at the paper, and the paper looked at him. Neither one spoke to the other. For the first time in his long career, my colleague was at a loss for what to do next.
Selling or exiting a business often marks the culmination of years of hard work, sacrifice and dedication. But what comes after that? Many entrepreneurs and wealth creators find themselves at a crossroads once they exit a business, unsure of how to navigate their next steps. This transition can be as challenging emotionally and psychologically as it is financially.
From Entrepreneur to Wealth Steward
One of the most profound shifts people experience after selling or leaving a business is the move from being a business operator to becoming a steward of wealth. They are now in charge of managing the family financial enterprise they've built.
For many high-net-worth individuals, the wealth they have accumulated won't be spent within their lifetime, and therefore every dollar they earn in the future will be for someone or something other than themselves. Suddenly, they realize that their financial decisions will have long-term implications — not just for themselves, but also for their children, grandchildren and society. This shift from being an “unintentional” to an “intentional” wealth steward is one of the key challenges that arise during this period of transition.
Overcoming the three common hurdles below can set you on the path to stewarding your wealth with intention and can help you find purpose and meaning during the next chapter of your life.
Three Hurdles and How to Overcome Them
- Loss of Purpose/Post-Sale Blues
Working hard and building a successful business can provide a great sense of self-identity and purpose. Your goals are clear. But when you exit a business, suddenly there is a void. Who are you if you're not defined by your work? What's your purpose is if it's not striving to make the business better? All this can create a surprising feeling of loss and unease.
Solution: Now is the time to “recalibrate the lens” you use to look at the future. Often, people define themselves by what they do. But it's not about what you did, it's about what you brought to that occupation that created your success. When you succeeded in business, it wasn't that you worked in health care or real estate or finance. It was that you brought certain strengths to that venture. Go back to those foundational elements — your strengths, weaknesses, values and passions — and ask yourself, “What do I want to do that will allow me to use those innate tools?” It can involve pursuits such as philanthropy, social impact, additional entrepreneurship or travel. Whatever it is that you strike upon, it should speak to you and your core foundational strengths.
- Changing Relationships
The relationships you have with your spouse, children, friends, other family members, former employees and advisors tend to shift when you exit a business. For one thing, at least initially, you're around a lot more, which impacts your spouse and children. They continue with their same routine, but now you will be in the process of establishing new routines, which can be unsettling and cause friction. Managing newly realized family wealth can also create complex family dynamics. In addition, your relationships with friends and colleagues often need adjustment if they are still working or lack the level of wealth that you have. Furthermore, you will find that people start requesting things of you now that you have substantial wealth. This can leave you feeling isolated and alone.
Solution: Open and honest communication is crucial. During this transition, it's important to work closely with your spouse and children to adjust to the new routines. Allow time for this adjustment, which can take anywhere from six months to two years. Establishing regular family meetings where important topics — such as financial goals, philanthropic initiatives and succession planning — are openly discussed creates a platform for everyone to share their thoughts and concerns.
Also consider joining a peer group, particularly one with specific wealth requirements, to surround yourself with people who are going through similar experiences. Peer groups provide a safe space to discuss the emotional, psychological and financial aspects of post-exit life, helping to reduce feelings of loneliness. It's also important to create a plan to manage all the requests for your time, your money and your influence that inevitably will come your way. Many people who go through this transition are amazed at how quickly they become overcommitted. Establishing boundaries protects your time and emotional energy.
- Control of Wealth
With great wealth comes great responsibility. Investment strategies, tax planning and philanthropic giving, among other things, now occupy your attention, often requiring expertise you may not have developed while running a business.
Suddenly, you're faced with a confusing marketplace filled with financial advisors and services. You're constantly bombarded with pitches and proposals, but without a clear sense of who is truly the best fit, building trust becomes a challenge. This process can feel like a loss of control, as you're forced to rely on others for things you were once able to manage and control on your own.
Solution: The first thing you should do is: nothing. Park your money in a safe place and just do nothing with it for six months. Take that time to do research and figure out what type of advisors you need. Do you need a single-family office? A multi-family office? You'll also want to set up the practicalities for your annual income. The cost of waiting is so little, but the cost of rushing and making mistakes is very large. Peer communities can also be helpful, since members have gone through similar circumstances and can offer unbiased advice.
Your goal is to surround yourself with a trusted team of financial, legal and tax advisors, who can help you develop a comprehensive financial plan that aligns with your long-term goals and values.
The Path Forward: Redefining Success
As you transition to your new chapter, it's important to redefine what success means for you. For many, this involves shifting focus from building a business to managing a family financial enterprise as a wealth steward. Whether through worldwide travel, philanthropic endeavors, supporting future generations or investing in new ventures, your post-exit life can be as fulfilling as the journey that got you here.
Taking the time to plan for this next phase will allow you to not only navigate the challenges that come with wealth but also find renewed purpose and passion in whatever comes next.