Founders Exit Plan: 1 Year Post Sale
FINDING YOUR NEW NORMAL
The one-year mark is a good point to reflect and establish your longer-term post-sale identity. By now, the business sale process is a distant memory, and you’re firmly in whatever comes next.
Finalizing any contingent payouts: If your deal had an earnout or deferred payment tied to the first-year performance, this is when you’ll know the outcome. Hopefully, the business hit the targets and you receive that additional payment. (If not, try to take it in stride – you negotiated the best you could, and now it’s beyond your control.) Also, many escrow holdbacks for reps and warranties last about a year – if no claims, that escrow money will be released to you now. Coordinate with the escrow agent to get any remaining funds. Essentially, at one year out, you often truly get the last of your sale proceeds that were held back. Celebrate that milestone and update your financial plan with this additional capital if it’s coming in.
Post-transition relationship with the business: At this point, you’re likely no longer involved day-to-day (unless you signed on for longer, but typically a year is the high end for a transition). You might still be on call for occasional questions, but those should be fading. Consider formally stepping back if you haven’t already – for instance, if you remained on the board or as a consultant, you might assess whether you want to continue or if it’s time to fully cut the cord. Often, a year is a natural breaking point to let the new owner fly solo.
Reflect on the journey: Take some time to reflect on the sale and your journey as a founder. What went well? What would you do differently if you had to do it again? This reflection can be therapeutic and also educational if you ever venture into business again. Some entrepreneurs even document their experience (write a blog, give a talk, or just journal it) – it can provide closure and help others. You now have the benefit of hindsight to appreciate your accomplishments and mistakes.
Explore new purpose: Many former business owners, after some time off, start feeling the itch to do something productive again. You might already have started a new project or job; if not, consider what fulfills you:
Perhaps you become an angel investor or mentor to other startups, using your experience to help others and staying engaged in business but without the full responsibility.
You might join a board of directors of a company or non-profit. This keeps you connected and provides a sense of contribution.
Maybe you volunteer or support causes you care about. Philanthropy or community work can offer a new sense of purpose and leverage your leadership skills in a positive way.
If you’re itching for a new venture, start carefully planning it. But remember any non-compete you have – don’t violate it. If you had, say, a 3-year non-compete in the same industry, use this time to perhaps explore a different field or plan a business that would launch after it expires.
Some folks take up teaching or writing – sharing your knowledge can be very satisfying and keeps you sharp.
Family and lifestyle: After a year, you and your family should have adapted to the changes. Check in: are you spending your time in ways that align with your values? Maybe you promised your spouse more time together – are you delivering on that? If you moved or bought that dream house, are you enjoying it? Ensure the wealth you obtained is improving your life, not complicating it. Sometimes sudden wealth can cause strain (e.g., people asking for money, or overindulgence). Stay grounded – possibly involve a family wealth counselor if needed to manage new dynamics.
Financial check-up: Meet with your financial planner to review the first year post-sale. Are your investments performing as expected? How did your actual spending compare to the plan? This is a good time to tweak your financial strategy now that you have a year of real data. Also, discuss any changes in tax laws or estate laws that might affect you – for instance, if you set up a trust, ensure it’s funded properly and you’re following through with any needed steps.
Health and happiness: Many former business owners find that after stepping away, their health improves (lower stress!) and they rediscover personal joys. Make sure you’ve gotten any health checkups you might have postponed. Engage in physical activity, sports, or travel – whatever keeps you healthy and happy. The goal is that by the one-year mark, you’re not just “getting by” without the business; you’re truly thriving in your next phase. If not, identify what’s missing. Some people realize they miss the challenge of business and thus start consulting or a new venture. Others realize they hadn’t been relaxing enough and decide to travel more. Use this checkpoint to consciously shape the life you want.
Emotional closure: By now, any raw emotions about selling should be settling. If you still feel pangs of regret or loss, reflect on why. It might help to remind yourself of the reasons you sold and the benefits you and the business gained. Perhaps the business has grown even more under new ownership – that can validate your decision. Or maybe it hasn’t – but remember, you gave it a great foundation and you got your reward; you can’t control everything after. Find closure in knowing that you successfully passed the torch. Many founders actually report feeling happier about their decision after a year, once they see things turn out okay. And if you do still feel a void, consider professional advice or reconnecting with passions that can fill it.
Milestone: One year after selling, you have hopefully fully transitioned into your new identity beyond the business. The sale is in the rear-view mirror, and you’re focused on the present and future. Take pride in joining the ranks of entrepreneurs who not only built a business but also successfully exited – that’s no small feat! Now, we’ll briefly look at the longer-term outlook beyond year one.
