After selling your business, you might be raring to start another one. But how long should you wait, and when will you know?
I sold my social media agency for 7 figures in 2021 and wasn’t sure what to do next. I ended up taking two years to launch my next business, and I’m glad I waited. I learned a few important things along the way that you might find useful, too.
Everything that made you successful doesn’t just stop after you sell. You’ll still be ambitious. You’ll still love the highs and lows of running a company. You’ll still want to hit deadlines and goals and be working toward something meaningful. But without the vehicle you once had, you might not know how to channel all this energy.
After your exit, you might feel relieved and ready for a break, but you’re still the same you once you’ve had that break. After rest comes restlessness. You might start to think you want to do it again. How do you know when the time is right?
Starting a new business after an exit
Here are three steps before diving headfirst into a new venture.
1. Give yourself time to move through temporary phases
A.J. Wasserstein, an entrepreneur turned academic, wrote about the five types of post-exit entrepreneurs. They are the recreationalist, the discoverer, the philanthropist, the investor and the do-it-againer. After your sale, you will probably go through phases of each one.
The mistake here would be to believe that whichever label you identify with most at this moment is how it will be forever. Just because you made one investment post-sale, you’re now an investor. Just because you made a donation, you’re now a philanthropist. Just because you went traveling for a few months, you’re now a discoverer. It’s just not like that.
The key to moving forward is allowing each phase to arrive without expecting it to stick around. Enjoy your travels and dabbles, but let them ebb and flow with your interest. While you’re ebbing and flowing, don’t start another business. Unlike a trip away, which you can cancel at any point, once you start a business, your personality means you’ll probably go all in.
Make absolutely sure that starting another business is what you want long before you get cracking, or you’ll wind up feeling stuck and eager to exit. Sound familiar?
2. Don’t rush, just breathe
After you sell, allow yourself to pause. Sit in the void. Journal about the feelings that come up when work is no longer part of your life. Notice what rushes to fill the space without identifying with it or springing into action. Depending on your personality type, you’ll find pausing a piece of cake or incredibly difficult.
Reflect on your years running a business and what you enjoyed and didn’t. Aim for intense self-awareness and clarity about where you are right now.
Every time your busy mind tells you to pick up the phone, make that deal, sign that contract or buy that domain name, stop. As your mind makes sense of this new routine, it’s trying to find stability somewhere. This is exactly where people go in too deep too soon. Don’t be that guy.
When I was in the post-exit phase, I ran experiments. Three months after exiting in March of 2021, I spent a month teaching for an entrepreneur accelerator, a month recording podcasts, a month making courses, a month writing a book and a month competing in my sport. Each was a finite project that wasn’t allowed to continue indefinitely. The point was to see where my interests took me, with no pressure to commit.
Even if you decide to start another business, you don’t have to start from scratch. You could join an ambitious startup as a late co-founder or buy a business from someone else. All options are on the table now, so don’t cut ties or move too soon.
3. Pour your business ideas into a spreadsheet
You probably have several new ideas daily for businesses you could start and problems you can solve. After you sell your business, the floodgates seem to open, and you have even more. With time at your disposal, now might seem the perfect time to try a few out. But it’s not.
In the two years between selling JC Social Media and launching Coachvox AI, I had many business ideas based on a set of parameters I didn’t stray from. Those parameters, coupled with a spreadsheet, saved me from all sorts of ventures I would have regretted. Each new idea became a new row on the spreadsheet. I let myself ideate within that spreadsheet, writing the name of the potential business, the target audience, the problem it would solve for them, the resources I had to make it a success and the first five moves I’d take to get started.
When I was looking to start a business after exiting, I wasn’t looking to start a business. It was all an elaborate search for dopamine. I wanted to feel useful, not like I was stagnating. Without the progress and in the absence of my fast-moving agency to spark that response, it had to be channeled elsewhere. Into that spreadsheet those ideas went, and by the time we launched Coachvox AI, there were 27. The original idea for Coachvox was idea 22, but since then it’s evolved.
If I’d have gone for idea number 1, I’d be flogging a dead horse by now. If I’d gone for 2, 3, or 4, I wouldn’t have been able to capitalize on the AI revolution that’s in full force. I’m glad I waited and urge you to do the same.
Rarely does a second-time founder wish they had acted sooner, but plenty wish they had waited longer.
How long should you wait?
Only you can decide when you should start a new business, but if you’re in any doubt, wait a bit more.
Ideas might hit you like a lightning bolt, but the one you move forward with should be the one you can’t stop thinking about over a sustained period, at least several months.
If I had known then what I know now, here’s the advice I’d have wanted:
- Take your time. There’s no rush to decide the way forward. Let yourself process what has just happened. You have earned the right to relax!
- Don’t move until you see it. Hold off needing to define who you are, what you do or starting new ventures until you’re sure that’s what you want to do.
- Run experiments. You can do anything you want, so play around with this freedom. There’s no pressure to make anything a success or keep it going if you don’t want to.
- Find a support group. Reach out to people who have been in your situation and ask about their journey. Find out what they did and what they wished they had done after their exit, and think about which parts work for you.
Selling your business can be an awesome event, but it comes with unexpected side effects, loss of identity, sudden lack of purpose and having far less to do.
Avoid that urge to jump into a new thing, and take the pause you deserve and need.