Business exit planning: How to prepare for a new chapter

Selling your business is a monumental milestone – one that brings both opportunities and challenges. For many business owners, the transition can feel overwhelming. After dedicating years, perhaps decades, to building something so deeply tied to your identity, stepping away can feel like uncharted territory.

Yet exiting isn’t about stopping; it’s about gaining independence. It’s your chance to reclaim control over your time, energy, and priorities. But without a clear plan, that freedom can feel more daunting than liberating.

At RBC Brewin Dolphin, we’ve guided many business owners through this transition. Some thrive in their post-exit lives, while others struggle to find their footing. The key to success lies in preparation – not just financially, but mentally and emotionally.

The challenges of life after exit

Stepping away from your business is a unique experience, and every owner’s journey is different. But there are some common themes that we’ve observed:

• Shifting from accumulation to enjoyment: Many owners find it difficult to transition from saving and building wealth to spending it. Years of disciplined financial habits can make it hard to embrace the freedom you’ve worked so hard to achieve.
• Finding purpose: Without the structure a business provides, it’s common to feel adrift. Many start new ventures – not because they need the income, but because they haven’t prepared for a life without work.
• Embracing freedom: Some individuals thrive, balancing financial security with meaningful pursuits, and embracing a life of intention and purpose.

The difference between thriving and struggling often comes down to the preparation. By starting early and taking a thoughtful approach, you can create a post-exit life that’s fulfilling, purposeful, and truly your own.

A guide to selling your business

Thinking of selling your business? Find out how to get your finances in shape and prepare for the future in our comprehensive guide.

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The exit countdown: A framework for founders

Planning your exit can feel overwhelming, but breaking it into manageable steps can help. Here’s a rough timeline to guide you through the process.

Five years out: Envision your future

This is the time to start shaping your vision for life after exit. Consider these questions:

• Place: Where will you live? Will you stay in your current home, relocate, or spend time in multiple locations?
• Pastimes: How will you spend your time? Will you travel, volunteer, invest in other businesses, or explore hobbies?
• Philanthropy: What causes matter most to you? Are there social or environmental issues you’d like to support? What will you commit – capital, resources, time, or all of the above?
• People: Who will you prioritise? Think about the relationships you want to nurture and how you’ll stay connected with friends, family, and your professional network.

This is also a great time to take a closer look at your finances:

• Track your spending: Understanding your current habits can help you align your financial decisions with your values.
• Diversify your wealth: Remember, your business is likely a high-risk asset. Start shifting some of your wealth into pensions, diversified investments, and liquid assets. Tax-advantaged strategies take time to implement, so begin early and seek appropriate professional advice.

Three years out: Clarify the “How”

With your vision taking shape, focus on the practicalities:

• Organise your financial affairs: Ensure you understand how to access your pension, manage investments, and navigate tax implications.
• Create breathing room: Set aside the proceeds from your business sale. This will give you time to adjust emotionally before making significant financial decisions. 
• Plan for cash flow: How will you replace your income? This is the time to shape a cash flow strategy that aligns with your goals.
• Prepare for market risks: Build a robust emergency fund – larger than the typical fund of around six months’ essential expenses. A two-year buffer can provide confidence as you transition to the next chapter.

One to two years out: Rehearse your future

As the business exit approaches, start practising for your post-sale life:

• Test your freedom: Spend extended time in desired locations, explore hobbies, and plan and experiment with your schedule.
• Shift your mindset: Transitioning from accumulating wealth to drawing it down can feel uncomfortable. A clear plan and cash buffer can help ease this adjustment. We don’t work for money; we work for what money can be traded for.
• Tidy up the details: Move personal contacts off work emails, cancel professional subscriptions, back up important files, and consider how you’ll stay connected with your professional network.
• Strengthen relationships: If your peers are still working, you may need to adapt your social habits to maintain and build connections.

Life after a business exit: Take it slow

Once you’ve exited, resist the urge to rush into new commitments. Give yourself at least six months to adjust and reflect.

As a founder, you’re likely hardwired to focus on growth and reinvestment. This mindset doesn’t disappear overnight, and you may feel pressure to act quickly. But taking your time can lead to better decisions, particularly when it comes to allocating your capital.

In the meantime, learn how to shift your mindset:

• From working for money to working for yourself.
• From risk-taking to risk management.
• From sitting on wealth to living with purpose.

If you’re healthy and have supportive relationships, your post-exit life offers the rare opportunity to have it all: time, money, and freedom. But achieving that balance requires intentionality and thoughtful planning.

Turn your ideas into reality

Exiting your business is a significant life event, and preparation is the key to making it a success. Remember:

• Start early: Even if your exit is years away, begin shaping your vision now. Building the right habits today will set the foundation for tomorrow.
• Be intentional: Plan for what comes next – not just financially, but emotionally. Align your place, people, philanthropy and pastimes with your values to create a purposeful life. 
• Secure your future first: While second-time founders enjoy better success rates, it’s not guaranteed. Prioritise securing you and your family’s financial future before pursuing new ventures.

At RBC Brewin Dolphin, we’re here to help you navigate this journey. Whether you’re just starting to think about your business exit or are ready to take the next steps, we can provide the guidance and expertise you need to feel prepared and in control of your future. Let’s start the conversation – because your next chapter should be as rewarding as the one you’re leaving behind.

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The value of investments, and any income from them, can fall and you may get back less than you invested. This does not constitute tax or legal advice. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. You should always check the tax implications with an accountant or tax specialist. Information is provided only as an example and is not a recommendation to pursue a particular strategy. Information contained in this document is believed to be reliable and accurate, but without further investigation cannot be warranted as to accuracy or completeness.