For years, most business owners picture the sale as the finish line. Once the paperwork is signed and the money lands in the account, the hard part should be over.
Then Monday comes around, and there's nowhere to be.
Some of the people I work with have spent 20 or 30 years building a business. Most of their planning went into getting the sale over the line, and very little into what happens after it. So the question I hear most often after settlement is a simple one: "Now what?"
The first few months can feel strange
Running a business gives your week structure. Staff rely on you and the phone keeps ringing. When that stops overnight, it can be disorienting, even when the sale went well.
This is more common than people expect. The Exit Planning Institute, a US-based organisation, has reported that 76% of business owners who sold "profoundly regretted" it within a year. That figure comes from American research, so I wouldn't read too much into the exact number for New Zealand. But the feeling behind it is something I've seen here too.
Often the regret has little to do with the price. People miss being needed, and they miss the identity that came with being "the owner". A good sale doesn't replace any of that on its own.
Your business was doing more for you than you realised
For many owners, the business wasn't only a source of income. It quietly paid for a lot of things, and those things don't disappear when you sell. They just move to your personal budget.
A vehicle and phone that were business expenses
Accounting fees and professional memberships
Insurance policies owned by the company
Your regular income, whether salary or dividends, which now has to come from somewhere else
The business may also have been your main form of saving. Plenty of owners put every spare dollar back into growth rather than into KiwiSaver or investments. After the sale, the proceeds may be most of your wealth outside the family home.
KiwiSaver changes too. If you stop working, employer contributions stop with it. The government contribution is now 25 cents for every dollar you contribute, up to $260.72 a year, and it's not available to people earning over $180,000. These amounts are small next to a sale price, but they're worth knowing about when you plan your first year.
Check your insurance before you hand over the keys
This one catches people out. Income protection and key person cover are often owned or paid for by the business, and sometimes health insurance is too. When the business changes hands, that cover can end or no longer fit your situation.
It's worth reviewing what you personally hold before settlement, while you're still well and able to apply for new cover if you need it. If you're unsure what sits in your name and what sits with the company, Helium's insurance advice is a good place to start that conversation.
Parts of the sale can still be taxed
New Zealand doesn't have a general capital gains tax, and business.govt.nz notes that you usually won't be taxed on the profit from selling a business. Some parts of a sale can still be taxable, depending on how the deal is structured. Inland Revenue lists several of these.
| Part of the sale | How IRD generally treats it |
|---|---|
| Trading stock | The part of the price relating to stock is taxable |
| Depreciable assets | If they sell for more than their tax book value, past depreciation can be clawed back as income |
| Restraint of trade payments | Payments for agreeing not to compete are generally taxable to the seller |
| Personal or business goodwill | Generally not taxable |
| Earn-out payments | Treatment depends on what the payment relates to |
How the purchase price is split between these items can change your tax bill, so it's worth having your accountant involved before the agreement is signed rather than after.
Earn-outs and deferred payments
Many business sales include an earn-out, deferred payments or some form of vendor finance. That means part of the price depends on how the business performs under new ownership, or is paid over time.
I'd be cautious about building a retirement plan around money that hasn't arrived yet. The clients who feel most settled tend to plan on what's in the bank, and treat later payments as a bonus if they come through in full.
From business income to living off your capital
This is the biggest financial shift after a sale. For decades, the business produced income. Now your capital has to do that job instead.
It sounds obvious, but it changes how you think about money. A lump sum can feel enormous. Divide it across 25 or 30 years of retirement, allow for inflation and investment ups and downs, and the picture can look different. Some owners are surprised by how much they need to keep invested for it to last.
Timing matters too. NZ Super is available from 65 and doesn't depend on your income or assets. If you sell in your mid-50s, though, you may have a decade or more to fund on your own before it starts.
That's where a plan earns its keep. How much to hold in cash, how much to invest, what sort of funds suit your timeframe and how to draw an income from them are all questions our investment advice service works through with clients.
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Everyone will have an idea for your money
Word gets around when someone sells a business. Before long a friend mentions a property deal, or someone you've just met has an investment opportunity with great returns.
Some of these might be perfectly reasonable. Some won't be. The Financial Markets Authority's scams guidance is worth reading if unsolicited offers start arriving, especially anything promising high returns with little risk.
I often suggest the same approach I take with clients who receive an inheritance. Park the money somewhere safe and give yourself time. There's rarely a good reason to make big decisions in the first few weeks.
What people miss most
When I ask former owners what they found hardest, the answers are rarely financial. Mostly they talk about losing their routine and the people they worked with every day.
The ones who adjust well usually have something to move towards, rather than only something they've left behind. For some, that's a board role or part-time consulting in their industry. Others mentor younger business owners. Some travel for a while or give their time to a cause they care about. A few start another business (and I've learned not to be surprised by that).
None of these has to be decided on day one. But having some idea of how you want to spend your time makes the financial plan easier to build, because the plan exists to pay for that life.
Questions worth asking in the first year
These are some of the questions I work through with clients after a sale:
What do I want a normal week to look like in two years' time?
How much income do I need, and for how long before NZ Super starts?
What did the business pay for that I now need to cover myself?
Is my insurance still right for me without the business behind it?
How much of the sale price is certain, and how much depends on an earn-out or deferred payment?
Do my will and any trust arrangements still reflect my situation?
Am I comfortable with how the proceeds are invested, and could I explain the plan to my partner?
The biggest mistake I see
The most common mistake I see is treating the sale as the end of the plan.
Business owners are good at planning. They've spent years managing cash flow and staff. But often all of that planning stops at settlement, and the next 30 years are left to sort themselves out.
A sale is one of the largest financial events most people will ever go through. It deserves the same kind of thinking you'd give a big business decision, applied to your own life this time.
Planning for the next chapter
Selling a business can open up a lot of freedom, and many of my clients go on to enjoy the years after it enormously. Usually they're the ones who spent some time thinking about what comes next, and had a plan for the money before it arrived.
If you've recently sold a business or are getting ready to, Helium's financial planning and investment services can help you work out how the proceeds fit into the rest of your life. You can find out more about us at Helium Financial Planning. The first conversation is always free.
Frequently asked questions
Do I pay tax when I sell my business in New Zealand?
New Zealand doesn't have a general capital gains tax, so the profit on selling a business is usually not taxed. Parts of a sale can still be taxable, such as trading stock, recovered depreciation and payments for a restraint of trade. How the price is allocated matters, so it's worth involving your accountant early.
What happens to my KiwiSaver after I sell my business?
Your KiwiSaver stays with you. If you stop earning an income, contributions from an employer will stop, and you'll need to contribute yourself to qualify for the government contribution. Your savings can generally be withdrawn from age 65.
Does selling my business affect NZ Super?
NZ Super doesn't depend on your income or assets, so the proceeds from a sale don't change your eligibility. It's available from age 65 if you meet the residency requirements.
How soon should I invest the money from selling my business?
There's no set timeframe. Many people find it helpful to hold the money somewhere safe for a few months while they settle into life after the sale, then invest once they have a clear plan for their income and how much risk they're comfortable with.
Should I review my insurance after selling my business?
It's worth checking. Some cover, such as income protection or key person insurance, may have been owned by the business and can end when it's sold. Reviewing your personal cover before settlement gives you time to arrange anything new while you're still eligible.
Jeshal Patel
Certified Financial Planner
Disclaimer
This article is general information, does not consider your financial situation or goals, and does not constitute personalised advice. There are no warranties, expressed or implied, regarding the accuracy or completeness of any information included as part of this article.