What to Do When the Business Sale Wire Hits

Most business owners, if not all, would agree that you need to devote a tremendous amount of time and effort to the sale of a business. Among other things, you work through a process to identify the right buyer, you negotiate and agree to a sale price and other important terms, and then you commit a lot of time, energy and resources as all parties work through the other aspects of the due diligence process. If all goes well, you make it to the closing table, documents are signed, money exchanges hands via wire and then you celebrate!

After spending so much time, effort and energy building and preparing the business for sale, you may start to ask yourself what’s next? What are your options to consider regarding your increased liquidity? What planning opportunities exist and which strategies make sense for you to consider implementing, given your individual circumstances and goals? It’s likely that you have never previously sold a business before, so you could find yourself in brand new territory and in need of perspective on what’s prudent to consider—this combination can be daunting. To ensure you reach and maintain your financial independence, as well as reduce any anxiety that may accompany your future circumstances, our firm recommends having a financial plan in place before the settlement wire is sent.

Our team often plays an active role in collaborating with our clients in the pre- and post-sale planning process. One of the steps in our pre-sale planning process is creating a sales proceeds waterfall, which is a process that fleshes out how the gross proceeds from the sale of your practice will be allocated. There is no shortage of avenues vying for your business sale’s cash proceeds. For example:

  • taxes (capital gains, etc.)
  • mortgage/debt payoffs
  • philanthropy (e.g., donor-advised fund)
  • real estate improvements
  • second home purchase
  • rollover equity in business acquisition
  • personal and retirement plan investment
  • future education expenses
  • future one-time expenses (e.g., weddings)
  • travel/leisure

For those considering a sale, we recommend focusing on three elements that can help create a tremendous amount of peace of mind for you before the wire hits.

Know where you stand financially

Your Corient Wealth Advisor should be able to develop a plan with your individual goals in mind, to help you visualize how your finances will change given a proposed sale, as well as how the sale of a business supports your goals and objectives. A thorough planning process should help you understand the value of your business and personal financial situation, and this process may help you determine the economics required in the transaction to achieve your financial goals.  

Understand cash flow after the sale

We recommend approaching post-sale cash flow planning via a “Whole Balance Sheet Approach,” which includes: 1) estimating all your sources of post-sale annual income, 2) understanding your true, ongoing living expenses, including expenses that might have previously been paid by the business, and 3) planning for future events that come with a capital commitment (e.g., education funding, weddings, remodeling and assisting children with the purchase of a first home).

Making your money last a lifetime

An infusion of several million dollars into your portfolio should prompt a review of your existing investment strategy, as well as ensuring you have an investment strategy to properly invest the proceeds from your business sale. Among other things, you’ll want to consider whether to invest the cash more aggressively or embrace a dollar-cost-averaging strategy to help ensure that your portfolio is sufficiently diversified and is designed with tax efficiency and future withdrawals in mind.


Brett Covert

Brett Covert

Partner, Wealth Advisor

Brett is a Partner, Wealth Advisor in our Charlotte, NC, office. He has worked in the wealth management industry since 2008, catering to high net worth and ultra-high net worth families across the U.S., with a focus on serving the dental industry. Brett has been invited by the CFP Board on multiple occasions to create exam test questions as well as audit exams, and he is a co-author of Building Your Wealth Inside Corporate America: Financial Strategies for Today’s Executive. Brett holds a Juris Doctor from the West Virginia University College of Law and became a CERTIFIED FINANCIAL PLANNER™ professional in 2010.


This information is for educational purposes and is not intended to provide, and should not be relied upon for, accounting, legal, tax, insurance, or investment advice.  This does not constitute an offer to provide any services, nor a solicitation to purchase securities. The contents are not intended to be advice tailored to any particular person or situation. We believe the information provided is accurate and reliable, but do not warrant it as to completeness or accuracy.  This information may include opinions or forecasts, including investment strategies and economic and market conditions; however, there is no guarantee that such opinions or forecasts will prove to be correct, and they also may change without notice.  We encourage you to speak with a qualified professional regarding your scenario and the then-current applicable laws and rules.

Advisory services are offered through Corient Private Wealth LLC and its affiliates, each being a registered investment adviser (“RIA”) regulated by the U.S. Securities and Exchange Commission (“SEC”).  The advisory services are only offered in jurisdictions where the RIA is appropriately registered.  The use of the term “registered” does not imply any particular level of skill or training and does not imply any approval by the SEC. For a complete discussion of the scope of advisory services offered, fees, and other disclosures, please review the RIA’s Disclosure Brochure (Form ADV Part 2A) and Form CRS, available upon request from the RIA and online at https://adviserinfo.sec.gov/. We also encourage you to review the RIA’s Privacy Policy and Code of Ethics, which are available upon request.

Our clients must, in writing, advise us of personal, financial, or investment objective changes and any restrictions desired on our services so that we may re-evaluate any previous recommendations and adjust our advisory services as needed. For current clients, please advise us immediately if you are not receiving monthly account statements from your custodian. We encourage you to compare your custodial statements to any information we provide to you.