Bylined to: Liz Jackson MBE, Director, Initium Corporate Finance

For many entrepreneurs, the sale of a business represents the culmination of years of hard work, late nights, and strategic decision-making. It’s an emotional and monumental moment in any entrepreneur’s life. Yet, in reality, selling a business is not the final destination; it’s merely the beginning of a new chapter, one that involves significant life transitions, new opportunities, and the careful management of wealth.

Selling a business is about much more than walking away with a payout – it’s about ensuring that the sale aligns with future goals and aspirations, both personal and financial. As with any major milestone, this transition requires preparation and thoughtful planning.

Liz Jackson MBE, Director at Initium Corporate Finance, explains how business owners can prepare for this momentous occasion and highlights the personal shifts and opportunities that follow beyond the financial transaction.

The importance of preparing early

Entrepreneurs who achieve successful exits understand that the process of selling a business should never be rushed. Planning for a sale involves years of strategic decisions, from maximising the value of the business to securing personal financial stability. Business owners should begin preparations well in advance, ideally several years before the sale is even on the table.

This preparation isn’t solely about securing a favourable business valuation – it’s about ensuring that the entrepreneur’s personal finances are in top shape to handle the influx of capital from the sale of the business. Maximizing personal pensions, reviewing and updating estate plans, engaging with tax advisors, and understanding the tax implications of the business sale are critical steps in this process. By doing this, entrepreneurs can avoid costly surprises and protect the wealth they’ve worked so hard to accumulate.

Furthermore, engaging with financial and legal advisors early on allows for the opportunity to structure the company sale in the most advantageous way. It’s vital to have experts who can help navigate the complexities of capital gains tax, inheritance tax, and wealth preservation strategies, ensuring that the financial outcomes post-sale are optimal. After all, managing life-changing sums of money is no small task – it requires expert guidance and a long-term perspective, particularly for those considering how to sell my business.

What does life post-sale look like?

One of the most important questions entrepreneurs need to ask themselves is: “How much is enough?” While the sale of a business brings financial security, it also brings the opportunity to rethink life goals and ambitions. For some, the focus post-sale will be on personal passions, such as rewilding land, investing in environmental causes, or perhaps exploring a long-dormant hobby. For others, it may involve supporting their family through investments in their children’s or grandchildren’s education or charitable causes close to their hearts.

The transition from running a business to managing personal wealth can feel overwhelming, but it also opens doors to new possibilities. A key consideration is to ensure that the wealth earned from the company sale is in alignment with future ambitions. Whether it’s travel, philanthropy, or pursuing new business ventures, clear financial planning is essential to make sure that the wealth will last and serve these goals effectively. This is why succession planning and driving value in your business is so crucial early on.

Protecting wealth and liquidity

After the business sale, many business owners face liquidity risks that they may not have anticipated. One common misconception is assuming that all the proceeds from the sale are fully protected by the banking system. The Financial Services Compensation Scheme (FSCS), for example, only guarantees up to £85,000, so it’s essential to spread the wealth across multiple accounts to ensure it is fully protected. For business owners who have just sold their companies, the proceeds are likely to far exceed this threshold.

To mitigate the risk, it’s critical to work with a trusted corporate finance advisor who can help spread the wealth across different accounts and institutions, ensuring that liquidity is safeguarded while simultaneously protecting assets for the long term. Entrepreneurs should aim to build a strategy that not only preserves their wealth but also offers growth opportunities over time. This is where sell-side advisors and experts in M&A services play an important role, as they help manage the complexities of business sale transactions.

Finding a new identity

For many entrepreneurs, selling their business may provoke an unexpected emotional response. A sense of loss can emerge when the company that defined their daily life, identity, and professional purpose is no longer part of their routine. This identity shift can feel disorienting, and it’s not uncommon for business owners to feel a sense of detachment post-sale.

In this period of transition, it’s helpful to seek out support networks, such as the Fellows group, where former business owners can connect with others who are experiencing the same emotions. These networks provide a sense of camaraderie, much like joining a parents’ group like the NCT or a school or college alumni. Entrepreneurs can share their experiences, navigate the emotional aspects of transitioning out of their businesses, and even explore potential opportunities that resonate with their new identity.

The sense of belonging in such networks can be critical in redefining purpose and finding new meaning in life post-business sale. It also offers a platform to discuss financial, philanthropic, and personal ventures that are now possible, helping entrepreneurs reshape their identities beyond the role of business owner.

Beyond the sale: creating an impact

Today’s entrepreneurs aren’t just walking away from their businesses with a sense of financial security; they’re also looking to make a lasting impact on the world. Many are choosing to channel their wealth into ethical investments and green banking, ensuring their wealth contributes positively to society. Business owners are becoming more conscious than ever about the legacy they leave behind, not just in terms of financial success but also in terms of their contributions to society and the environment.

For these entrepreneurs, the sale of their business isn’t the end – it’s a stepping stone to something even more significant. Whether through philanthropic efforts, sustainability initiatives, or mentorship for the next generation of business leaders, they see their wealth as a tool for making a positive difference. By strategically investing in causes that matter to them, they can ensure that their legacy is one of impact and purpose, rather than just profit.

When looking at the business exit strategy, whether the goal is building business value or understanding how to sell a company, the sale is just the beginning. With expert guidance from a corporate finance advisor, entrepreneurs can be confident in both the financial outcomes and the legacy they leave behind.

Source: Finance Derivative

Becky Willan, CEO and Co-Founder of Given

The Challenge

Banks and businesses in the financial services industry are coming under greater scrutiny for not only how they invest their money but, increasingly, who they invest it with.

In June, Barclays came under attack – quite literally, with 20 branches vandalised across the UK – over accusations of links to defence companies supplying Israel. This led to the suspension of their sponsorship of all Live Nation music festivals, and prompted the bank’s chief executive, CS Venkatakrishnan, to write an opinion piece in the Guardian about what he called “a ​​campaign of disinformation against Barclays”.

Lloyds Banking Group is another high profile example after its AGM was disrupted by pro-Palestinian and climate activists in May. Two years ago the bank committed to end direct funding of new oil and gas exploration projects, but for some this does not go far enough, with the protesters demanding Lloyds divest from all fossil fuel and arms companies.

This comes amid growing concerns about the lack of sufficient capital to fund the transition from “grey to green”. As we have seen, financing projects from oil and gas companies, even if there’s a clear decarbonisation agenda, now comes with increasing reputational risk for banks. And yet we can’t achieve a low carbon economy without system-wide transformation.

The banking industry operates in a challenging space when it comes to navigating purpose, but do these institutions deserve the level of criticism we’re seeing in the media?

What we do know is that businesses operating in the sector need to have more clarity and focus around what their purpose is.

Our recent Purpose Gap Report revealed that over a quarter of respondents in the financial services industry (26%) are actively thinking about leaving their current job role due to their company’s failure to deliver on corporate purpose promises. This compares to a 13% average across all sectors looked at in the report. At twice the rate of dissatisfied employees, financial services appears to be lagging behind other industries.

Additionally, over half (56%) of consumers say it is important to them that their bank acts sustainably and/or ethically. It is therefore essential for businesses in the financial services industry to consider carefully their purpose and corporate values and ensure they align with the causes their stakeholders are passionate about.

Making this change, while important to the longevity of the institution, can be complicated to implement and investment decisions are not always clear-cut.

According to the same report, additional blockers cited by those in finance wishing to make positive change were among the following:

• It is too costly
• There is a lack of understanding across the business around potential positive impact
• It is not a business priority
• There is an overall lack of commitment from leadership
• There is a lack of integration of purpose within employees’ roles

A year on from the fallout of the Coutts / Nigel Farage scandal, which saw Dame Alison Rose step down from her position as NatWest’s chief executive, some are fearful of the risks associated with moving away from business as usual.

Widely reported at the time was Coutt’s internal memo that the Reform UK MP’s views were “at odds with our position as an inclusive organisation.” Whether this was about principles, or politics, the scandal brought purpose into the spotlight.

Missteps can happen in any walk of business, but we need to remember that purpose is about good business and strategic focus, not taking a moral high ground.

Adopting a purpose-driven business approach is also not in lieu of profitability – indeed it is essential. Profit without purpose is meaningless and purpose without profit is unsustainable.

The significance of profitability with purpose

The business case for purpose is now truly evident. Financial services organisations that contribute positively to a sustainable and inclusive future are simultaneously driving their own success.

A report by Deloitte last year found that most consumers agreed that a business’s commitment to sustainability affects their level of trust in the company. The study also suggests around a quarter of shoppers are willing to pay more for products that are more sustainable or committed to more ethical practices.

With investors, customers, and wider society increasingly demanding ethical, sustainable and positive actions from businesses, purpose-driven companies not only attract a wider, more impact-conscious group of stakeholders, but also see improved performance and greater resilience.

An Interbrand study found that purposeful brands, set on improving our quality of life, outperform the stock market by 120%.

Additionally, purpose-led brands attract and retain the best and most passionate employees, with EY reporting 84% of staff found it important to work for an organisation that positively impacts society.

A better way to bank

Nationwide is an example of a financial services model flourishing while helping change the world for the better. The building society has experienced year-on-year growth in the number of current accounts held since 2011, with a market share of 10.4% last year.

Boasting over 17 million customers, and a balance sheet of £272 billion, the institution celebrated its £2 billion profits earlier this year by offering a £100 profit share to each of its members under the Fairer Share initiative.

Additionally, the institution also donates 1% of pre-tax profits to charity, as part of its Fairer Futures initiative – a project developed alongside us at Given.

Led by its social purpose, Nationwide donates to partners working to combat homelessness; families living in poverty; and those suffering with dementia. Last year alone, charitable donations came to £15.5 million.

Asking the right questions

In the highly regulated financial services sector, boards of directors play a critical role in ensuring compliance with environmental, social, and governance (ESG) standards.

This extends beyond simple financial oversight to include the integration of ESG principles into the company’s goals and risk management frameworks, along with promoting ethical conduct and sustainability practices.

Board members will not find their questions answered by an aspirational turn of phrase about an organisation’s role in the world. Instead, purpose must be understood as a complete management strategy that is embedded into every part of an organisation. The right questions go beyond the ‘why’ to consider the ‘what’ and the ‘how’ too.

Businesses must create a space for learning, reflection and the idea that they can do better. Most boards regularly evaluate their effectiveness in governing a business. Not many look at this through the lens of purpose.

An annual “purpose stock-take” could ultimately be a valuable exercise ensuring that purpose really is embedded into the company culture and governance structure. It could involve asking the following five big questions:

• Are we satisfied with how much of our balance sheet is aligned with our purpose today?
• What are the biggest opportunities our purpose could unlock for our business?
• Would our different stakeholders recognise our purpose as more than simply words on a page?
• Are we clear on our “red lines” – the purpose promises we won’t break in pursuit of profit?
• When was the last time we challenged a decision on the grounds of our purpose?

Final Thoughts

Financial institutions are now being scrutinised more than ever, but there is more than just reputational risk at stake. There is one final question those in the sector should ask themselves: what risks are we exposed to by not clearly defining and living our purpose?

The repercussions here could be incredibly damaging to the overall health of a business: falling foul of regulation; reduced employee morale and productivity; lack of consumer and investor trust; lack of long-term growth and resilience.

This can be avoided if businesses take the time to define and embed their purpose and values, using them as a management approach to profitably solve problems of people and the planet.

Adopting a purpose-driven approach is a strategy that may seem daunting at first, but asking the right questions and implementing an open and collaborative approach is a step in the right direction.

Source: Finance Derivative

By Barley Laing, the UK Managing Director at Melissa

According to Nasdaq’s 2024 Global Financial Crime Report $3.1 trillion of illicit funds flowed through the global financial system in 2023.

As a result, it’s not surprising that most in financial services are investing heavily in advanced ID verification technology to protect themselves from fraud and meet Know Your Customer (KYC) and Anti-Money Laundering (AML) regulatory standards.

However, to bolster their ID verification efforts they need to do more, and the best way is by improving customer contact data quality from the outset.

Why is contact data quality so important?

From our experience the quality of contact data is key to the effectiveness of ID processes, influencing everything from end-to-end fraud prevention to delivering simple ID checks; meaning more advanced and costly techniques, like biometrics and liveness authentication, may not be necessary.

When a customer’s contact information, such as name, address, email and phone number are accurate the verification process becomes more reliable. With this data ID verification technology can confidently cross-reference the provided information against official databases or other authoritative sources without discrepancies that could lead to false positives or negatives.

A big issue is that fraudsters often exploit inaccuracies in contact data to create false identities and manipulate existing ones. By maintaining clean and accurate contact data ID verification systems can more effectively detect suspicious activity and prevent fraud. For example, discrepancies in a user’s phone or email, or an address linked to multiple identities, could serve as a red flag for additional scrutiny. This basic capability is more important than ever as identity fraud becomes increasingly sophisticated.

Address verification is the foundation of contact data quality

Address verification – having a consistently accurate, standardised address – is usually recognised as the cornerstone of contact data quality. Once you have access to up-to-date customer addresses it makes it much easier to match and verify identities across multiple sources.

Therefore, verifying the accuracy and legitimacy of an individual’s address should be the first step in any identity related process, with any discrepancies between a claimed address and official records highlighting a potential fraudster.

By catching these inconsistencies early ID verification technology can help mitigate risks, ensuring only legitimate users are granted access to services, protecting both their business and customers from fraud. 

Address verification also plays an important role in regulatory compliance, by ensuring that the address information provided meets KYC and AML regulatory standards.

Phone and email verification

As I’ve already touched on it’s not all about having an accurate address, the role of phone and email verification is also vital as part of a comprehensive ID verification process, and therefore in preventing fraud. Particularly when it comes to helping organisations to identify and mitigate possible fraudulent activity early on. Verifying all three contact channels together contributes to enhanced security by filtering out fake or high-risk contact information, improving the accuracy of the ID verification process.

Email verification involves analysing various factors such as the age and history of the email address, the domain and syntax, and whether the email is temporary. After all, new and poorly formatted email addresses are often tell-tale signs of fraudsters. Furthermore, the association of a single email with multiple accounts could highlight criminal activity. It’s only by checking if an email address exists and works, then examining those elements I’ve already mentioned, that organisations can identify possible high-risk indicators.

Phone verification is equally important in fraud detection. By verifying the type and carrier of the phone number, organisations can identify high risk numbers, such as those associated with VoIP services, which are commonly used in fraudulent activities.

Checking the validity, activity and geolocation of a phone number also ensures it’s not only functional, but consistent with the user’s claimed location. And like with email, a single phone number linked to multiple accounts can indicate fraudulent behaviour. 

Deliver contact data accuracy with autocomplete / lookup tools  

The best way to obtain accurate customer contact data is to use autocomplete or lookup services.

With an address autocomplete tool it’s possible to deliver accurate address data in real-time by providing a properly formatted, correct address at the onboarding stage, when the user starts to input theirs. Tools such as these are very important because around 20 per cent of addresses entered online contain errors; these include spelling mistakes, wrong house numbers, and incorrect postcodes, as well as incorrect email addresses and phone numbers, typically due to errors when typing contact information. Another benefit of the service is the number of keystrokes required when entering an address is cut by up to 81 per cent. This speeds up the onboarding process and improves the whole experience.

Similar technology can be used to deliver first point of contact verification across email and phone, so these important contact datasets can also be verified in real-time.

In summary

The success of ID verification technology, and therefore fraud prevention, hinges on the accuracy and quality of customer contact data. Having such data not only enhances fraud detection, but improves the user experience and operational efficiency. Financial institutions must make sure that data verification tools are used across address, email and phone, alongside their ID verification technology.