Transferring a business can be an intense experience—not just because of the sale itself, but also emotionally. You’re keeping the business running while simultaneously navigating the sales process. Many questions may arise: Will you remain involved in the company after the sale? How will your employees react? How do you feel about no longer driving to the office every day? About no longer being the person everyone turns to for decisions and guidance? Entrepreneurs respond to these questions in different ways. Still, there are certain matters every entrepreneur can start thinking about.
"}},{"componentType":"sectionTitle","title":"Preventing uncertainty"},{"componentType":"paragraph","richBody":{"value":"How will you manage the wealth you receive from the sale? At ING Private Banking, we often see entrepreneurs pour all their energy into the sales process. What happens to the proceeds? “We’ll think about that later,” or “I’m too busy right now,” are common responses. Or: “Let’s first see if the sale goes through.” And frequently: “I don’t yet know what I want to do with it.”
But once the funds from the sale suddenly appear in your account, it can cause unrest. What should you do with the money? That depends on many factors: Will you stop working and rely on the proceeds? Do you have other sources of income in the coming years? What level of risk are you comfortable with? Do you have experience with investing, real estate, or other types of assets?
You may want to use part of the proceeds to support your children or other loved ones. But do you want to give them a lump sum? Or are they still too young, and you’d prefer to maintain control? There are various ways to transfer wealth—the question is what suits your situation best. Do you have multiple children, perhaps at different life stages? Do you want to treat everyone equally—or not? And once you’ve clarified your intentions, how much do you want to transfer? It’s also important to know how much wealth you’ll need for the rest of your life. Thinking through your goals and engaging in financial planning is key.
"}},{"componentType":"sectionTitle","title":"Financial planning"},{"componentType":"paragraph","richBody":{"value":"A financial plan provides clarity, helps you make informed decisions, and brings peace of mind. When creating a financial plan, you’ll discuss your wishes, goals, and dreams. Suppose you stop working after the sale and live off the proceeds. You’ll estimate your annual spending on life’s pleasures, while also accounting for taxes and one-off expenses like a holiday home abroad, a boat, or a luxury car.
By running the numbers, you’ll see which portion of your wealth you won’t need in the short term—this can be allocated to investments, real estate, or other assets. And of course, it’s important to discuss how much risk you’re willing to take.
If your financial plan shows that your wealth will outlast your lifetime, you’ll have a clear view of what you could potentially transfer to your children or other loved ones. A financial plan allows you to “label” your wealth, helping you make thoughtful decisions. And that brings peace of mind.
"}},{"componentType":"sectionTitle","title":"Protecting your privacy"},{"componentType":"paragraph","richBody":{"value":"Another important consideration is your privacy. Suppose the sale is finalized and a press release is issued. You may then be approached by various parties offering “attractive” investment opportunities—or they may even show up at your doorstep.
How is that possible? Imagine your name is Piet van Bennekom, your personal holding company is called Piet van Bennekom Holding BV, and you’re listed as the sole shareholder of the sold business. Anyone can request this information from the Chamber of Commerce for a small fee. If your holding company is registered at your home address, including your email and mobile number, it becomes very easy to find you.
"}},{"componentType":"sectionTitle","title":"In closing "},{"componentType":"paragraph","richBody":{"value":"Finally, you may face situations you didn’t anticipate. Friends or acquaintances might ask you to lend money to their children—or to support their own business that’s going through a rough patch. It’s wise to prepare for these kinds of requests and decide how you want to handle them. Experience shows this happens more often than you might expect.
In short, receiving (or expecting to receive) significant wealth requires careful consideration and preparation for various scenarios. The good news is: you don’t have to do it alone.
Written by: Sander Broekhuizen, Relationship Manager ING Private Banking
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