Selling your business - what next?

One of the issues for entrepreneurs who sell their business is what they should do with the proceeds. To go from being immersed in your business to more wealth than you are used to can be a worry for people who are used to being completely in control of their affairs.

Man on ladder looking over city skyline - Rathbone Investment Management
Ian Tansley

By Ian Tansley, Investment Director

The right course will depend on the terms of the sale and your life circumstances. The sale may be outright or phased, requiring ongoing participation in the business. Your age, family situation and future work plans will all impact on the best way to organise your affairs for the future.

The first step is to consider financial planning, such as paying off any mortgages, maximising your pensions and establishing tax planning structures. It is important to receive advice from a good independent financial adviser and/or tax specialist. At Rathbones, we can work with your external advisers or we can introduce you to our in-house specialists.

Having arrived at a pot of funds, it is important to identify the right investment strategy to meet your needs. Cash is an unattractive investment as many deposit accounts currently offer minimal interest after inflation, yet entrepreneurs often prefer to keep their cash in the bank rather than risking the proceeds from the sale of their business through investing.

The key is to consider the likely time horizon for investments and what you want to achieve. Is it to generate income to support living, to grow the funds if your income is covered from elsewhere or a combination of the two? Fixed interest assets, such as government bonds, are generally used to generate income and are considered less risky than equities, which are historically more volatile, yet offer more upside over time.

These generalisations are not always reliable, however. Returns from many fixed interest investments are currently quite low and it is hard to generate sufficient income from these lower risk assets. Many stock markets are at or near all-time highs at present and the returns, particularly in the short term, may be limited. Investment managers understand these factors and diversify investments in a portfolio to reduce risk while generating income and/or capital growth.

At Rathbones, we understand our clients’ different circumstances and financial objectives. You have a direct relationship with the person who looks after your money – we do not use client relationship managers and this approach often leads to long-term relationships. We understand how hard our clients worked to build their business and they trust us to achieve their future financial goals.

Ian Tansley is an Investment Director in Rathbones’ Birmingham office. This article will be published in the August edition of Business Times, which covers Northamptonshire and surrounding counties (


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