Preparing for life and wealth after exit

It’s a major adjustment to give up the control and profile that comes with being the founder of the business; and even life-changing wealth can be an anti-climax

The shift to your business meaning less to you, and you meaning less to your business, requires psychological and emotional preparation. For those with a clear intention to sell their business, it’s important to look beyond the financial planning to the life choices and future career you want.

“Nothing prepares you for leaving your business and losing that power base. It’s like climbing a mountain, reaching the summit, finding nothing, and having to come back down,” says Martyn Dawes, who founded and sold Coffee Nation to Whitbread for £59.5m and has since become a high growth business mentor. It can also be very isolating says, Barry Chevallier Guild who sold Aspell Cyder at the beginning of 2018, “In the run-up, it is death by a thousand emails, countless meetings, late nights etc. Then it’s like the shutters coming down on a silenced room – apart from messages of congratulations – nothing!”

“It’s too easy to neglect health and wealth when focusing on growth or hitting a target,” says Lara Morgan, who built the global brand licensing business, Pacific Direct, over 17 years before selling a majority shareholding for £20m in 2008. Sharing her experiences immediately after selling, Lara said: “I had this list of stuff to do, like getting my teeth checked, my eyes checked; stuff everyone does but I’d ignored for so long. And surprisingly, managing my new wealth was a challenge in itself.”

Indeed, some members have commented that reprioritising health and well-being is key post-sale. Stephen Scanlan sold XRef in early 2018 and said, “(I now have) no excuses not to go to the gym, eat well and sleep 7-8 hours now! That has actually been at least as positive and as life-changing as the exit amount. Same for reconnecting with friends that I had been rubbish at keeping up with!”

A wealth manager can help business owners calculate how much they need to fund their lifestyle aspirations, but founders need to consider their new purpose. “There is an identity associated with founding and running a business; losing that could lead to a vacuum that needs to be filled”, says Rob Douglas, Relationship Manager at RBC Wealth Management. The lack of routine can be disorientating says Stephen, “you lack a sense of location, from a fixed office to a roaming entrepreneur – totally different way of life day to day”.

Members of The Supper Club like Martyn and Lara who have successfully exited their businesses for large sums have built different portfolio careers. Lara Morgan wrote the Amazon bestseller More balls than most, shares her experiences as a public speaker and recently founded, Scentered, a new venture.

To maintain the drive and momentum they once had, some members have made the mistake of taking on too many projects. “Working on lots of different things can be quite hard work and sometimes less fulfilling than building something,” says Martin Spiller, who built Only 4 U to £15m in five years before selling. “Being in groups like

The Supper Club and sharing experiences, both good and bad, is extremely helpful and I make sure that each year I review what has gone well, what hasn’t, and what I can do more of next year.”

Some members have become chairmen and non-execs to support other high potential entrepreneurs, but the transition from founder to an adviser can be challenging.

“When you run your own business, you’re very focused on that one thing but now I have to run in 6 or 7 directions, which is mentally hard to deal with,” says Zack Feather, who rapidly scaled Asclepius Global to £62m in seven years before selling to Blackstone. He has since become a non-exec for several businesses to help them learn from his experiences. “Culturally, you’re the most senior person in the business; but it’s not yours so you have to keep some distance.”

Many founders’ ultimate goal is to achieve a successful sale. But few understand how to calculate the magic number they need for the life they want to enjoy after an exit, how to achieve it and crucially, the preparation for the emotional impact of the sale. Planning for life and wealth after exit is just as important as preparing for sale or investment. But many founders only focus on the transaction – and often to their cost.

For anyone considering a sale or exit from their business, we always recommend talking to different founders who have been through the process to learn from their experiences and find the option that suits them most.