Kno w what you will do with the pro­ceeds

Finweek English Edition - - MONEY -

“Busi­ness own­ers of­ten fo­cus so much on their busi­nesses that they don’t think about them­selves,” says Louw. “For the first time in their lives they need to think about their per­sonal fi­nan­cial sit­u­a­tions.”

This is crit­i­cal be­cause run­ning a busi­ness and in­vest­ing re­quire com­pletely dif­fer­ent mind­sets.

“When you own a busi­ness you are sub­jec­tively in­volved, you con­cen­trate your as­sets and gear­ing is okay,” Louw says. “But in­vest­ing needs a very dif­fer­ent ap­proach. You need ob­jec­tive ad­vice be­cause you can get emo­tional about your own money, you need to di­ver­sify and when pro­duc­ing an in­come, gear­ing should be nil or limited.”

Hav­ing a fi­nan­cial plan in place be­fore you start the sell­ing process also helps a busi­ness owner know how much they need to re­alise from the sale.

“We tell our clients to get good wealth plan­ning ad­vice f irst be­cause it helps them to know whether their num­bers are re­al­is­tic or not,” says Gran­tham. “Sell­ers need to have a clear idea of how much is enough.”

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