Dominic Baldwin: The Five-Year Question Every Business Owner Should Answer Before They Sell

Towards the end of last year, Dominic Baldwin went to a funeral in West Riding. It was a celebration more than a sad affair. The man being remembered had lived a full life, and Baldwin had looked after him and his wife for about 30 years. Afterwards, over a cup of tea and a sandwich, the couple's two sons came over separately and said almost exactly the same thing. They wanted to thank him and his team for giving their mum and dad the confidence and belief to live the life they had lived. They had travelled the world, given to charity and helped their children out, and they would never have done it without the guidance and planning behind them.

What struck Baldwin was what never came up, then or in 30 years. "He never once talked to me about saving tax," he says. The tax planning happened, of course. His firm, Xentum, is good at that part. But it was never what the family remembered.

That story sits at the heart of how Baldwin thinks about money, and it carries a sharp lesson for business owners heading towards an exit. Most financial conversations start with the numbers: how much have you got, and what should you do with it? Baldwin starts with a different question entirely. What matters to you, and why? Until an adviser can answer that, he argues, they have no business recommending anything. He warns against the trap of thinking that creating lots of wealth is the goal. "It's not," he says. "It's just a facilitator."

Why Good Financial Decisions Start With Your Priorities and Values

Baldwin's conviction comes from his own family. His father was a farmer from the Lake District, and by his son's account a beautiful human being: generous, caring and over-trusting. He was an only child and inherited a reasonable amount of money in his late 20s. Without the right guides around him, he made one poor decision after another, and the wealth gradually dwindled. That created other challenges in his life.

Years later, Baldwin went through his father's paperwork from his 20s and 30s and noticed a pattern. "Nobody came into that room and said to my father, 'Talk to me about what matters to you and why,'" he says. "They all came into that room saying, 'How much money have you got? And I've got an investment that is appropriate for you.'" His question is simple. How could anyone know what was appropriate without understanding the person in front of them?

He is clear that his father was no exception. When he sits down with business owners who have built fantastic companies and real wealth, he often finds their grasp of personal financial planning is limited. Being brilliant at running a business does not translate into understanding the world of financial planning. And that gap is where people get hurt.

So before any product is discussed, Baldwin asks clients to do something most of them find unexpected. When the time is right, and the client feels safe enough to be a little vulnerable, he asks them to articulate the eight most important areas of their life. Some respond with a shell-shocked look. What has this got to do with wealth management? His answer is that it has everything to do with it.

The Eight Priorities Exercise and the Honesty It Demands

Listing eight priorities is only the start. The words themselves don't tell Baldwin much. Plenty of business owners will say family is a huge priority, but family can mean something very different from one person to the next. So he goes deeper, asking why it matters, and then asks the client to score how happy they are with that area on a scale of one to 10.

This is where honesty comes in. "We can all kid ourselves that everything's a 10," he says. Given some quiet time to reflect, a business owner might admit something harder: that they are working so hard they don't spend time with their children or their partner, or that when they are with them, they aren't really present. That person might score themselves a six. The follow-up question matters more than the score. What is stopping you from being present?

Values get the same treatment. Ask most people to name their core values and they struggle, or they offer values someone else gave them, or ones they found online. Baldwin wants the real ones, and he has a neat way of finding them. Think of someone you have unconditional love for, someone you admire. Why do you love them so much? How do they behave? The values you see in them, he says, will usually tell you a lot about the values that matter to you.

Taken together, a client's top eight priorities and top five core values give Baldwin and his team a foundation for every financial decision that follows. He admits it sometimes feels close to therapy, which he is careful not to claim to be. But he calls the work invaluable, and he is in no doubt about what it would have meant for his father. If somebody had done this exercise with him at 27, he believes, his decisions would have been very different.

Write Down Where You Wake Up Five Years From Now

The third exercise is the one that stopped host James Vincent in his tracks. Baldwin asks clients to imagine their life five years from now and write it down in detail, starting from the moment they wake up. Where are you waking up? What are the noises? What do the curtains look like? Who is lying next to you? What are your first thoughts, what does breakfast look like, and what are you excited about for the rest of the day?

Then, at the next meeting, he asks them to read it to him.

The exercise works because it forces a vague hope into a concrete picture. A goal like "a comfortable retirement" gives an adviser little to work with. A detailed description of a single morning five years from now tells them where you live, how you spend your time and what you would protect at all costs. It gives the client clarity about where they are heading, and it gives Baldwin's team something solid to measure decisions against. Vincent went further, saying it connects you to your soul to a degree, and urged listeners to pause and do the exercise there and then.

This is why Baldwin likes to meet business owners two to three years before a capital event, whether that is a sale, a retirement or an inheritance. Each is a transition, and his aim is to help clients through it with grace. The way to do that, he says, is to think about what the next chapter looks like before you get there. You don't need to be exit-ready to start. The clarity often works the other way round, helping owners decide what to do with the business in the first place.

How to Find Your Enough Number Before You Exit

The five-year picture becomes especially powerful when an owner starts thinking about selling. Plenty of businesses set out to sell for a round figure. Baldwin's first question about a £10 million target is where that number came from.

His alternative is to work out the owner's "enough number". That starts with what life after the business looks like and what it will cost. Where do you want to live? What holidays do you want, what cars would you like to drive? Do you want to pay for your children's education, help them buy property, cover their weddings, give to causes you care about? His team will sit with a family over time, gather all of that, and reverse-engineer the amount the business needs to sell for to give them the greatest chance of achieving it.

Because nothing is guaranteed, the next step is about probability. Using stochastic modelling across many years of data, the team can show an owner the likelihood of having enough wealth to fund everything the family wants for the next 50-odd years. Then the owner chooses how much certainty they want. Some are comfortable at 50%. Others want 80%, which means selling for more. Baldwin plays this out with clients in real time: sell for one figure and the probability is 62%, add a million and it's 72%, add three million and it reaches 80%. Often a partner is in the room too, and the couple decide together what feels right.

The result can be surprisingly motivating. Either the business is already worth more than the family needs, and the owner can start talking to M&A advisers with real confidence, or there is a gap. An owner who discovers they are £1 million, £3 million or £5 million short now has a specific target. Baldwin's advice at that point is to sit with your business coach and work out what needs to happen to close it. Either way, the owner knows exactly what they are doing and why, and he describes that as real financial wellbeing.

The Risk Trap That Catches Business Owners After a Sale

The values work earns its keep most clearly once the money lands. Baldwin has noticed that business owners, who happily carry the considerable risk of running a company, usually become far more risk-averse the moment they have a pot of money from a sale. That is especially true of those selling their main business rather than serial entrepreneurs.

Not everyone follows that pattern, and Baldwin shared a cautionary example. One client, highly entrepreneurial, sold his business for a multimillion-pound sum and didn't take any time to reflect. He assumed he needed to keep being entrepreneurial with the new pot and sat down with people who were motivated for him to invest it. They told him it was a great idea. It hasn't worked out as he hoped, and when Baldwin saw him a couple of months ago, he named it as one of his biggest regrets. He and his family had already created enough wealth to do everything they wanted. They never needed to take that risk at all.

What makes the story sharper is a detail that emerged from the values work. One of this client's core values after the sale was simplicity. Yet when Baldwin's team reviewed his structures, they were incredibly complicated. The team didn't understand half the products, the client definitely didn't understand them all, and the complexity was causing him real anxiety. Had his values been clear from the start, Baldwin says, nobody would have brought a complex solution to the table. Someone who values simplicity may well accept slightly lower returns for something they understand, and be more present with their family at the weekend as a result.

Baldwin's advice to anyone facing a capital event is plain: take time to pause, and don't take unnecessary risk. He also warns business owners to watch who is sitting across the table. If an adviser walks in knowing a client has just sold for one, three, five or ten million pounds and is motivated to sell them something, they may already have a product in mind. Too often, he says, that product is not appropriate and neither is its charging structure. It is why his firm has tried to remove as many conflicts of interest as possible.

Why Wealth Should Serve the Life You Actually Want

None of this is abstract for Baldwin. About 25 years ago, he was earning a lot of money in a good business but felt little pride, fulfilment or contentment. For his first 15 years in the industry, he says, he was motivated by sales, numbers and the perception of wealth. Losing his father around the age of 40 made him reflect on what really mattered. He turns 60 next year and talks openly about being driven by the difference he can make to people's lives rather than by making more money.

He has a coach of his own, a semi-retired CEO about ten years older, who challenges him to make sure his behaviour and energy go where they matter. When asked about his biggest mistake, he didn't hesitate: not getting a coach or mentor sooner. "I'm in my own show," he says, and he wants someone watching it who will help him put on a better one.

That idea of an honest outside view runs through everything he does with clients. Once priorities, values and that five-year picture are clear, financial decisions become much simpler. When a client is weighing up a decision, Baldwin asks whether the consequences fit what they have said matters. "More often than not, the client tells you the answer," he says. "They just need somebody to ask them the question."

When James Vincent asked what listeners should do first, Baldwin described what he and his wife, Wendy, do once or twice a year when they go away. They find a quiet corner, draw a big circle on a piece of paper, divide it into eight segments and write down eight things they are grateful for. Then they look honestly at their recent decisions and behaviour and ask whether those choices are having a positive impact on the things inside that circle. Only after that, he says, is it time to find someone who understands financial planning to build a strategy around it.

Most people skip that first part and go straight to performance, tax and structures. Baldwin finds that side of the work straightforward, even a little boring. The part he cares about is what happens on a hilltop in the Lake District at the end of a long walk, sitting with Wendy and their dog, Cadbury, with a cup of tea and a plain sandwich. Up there, he says, he never thinks about the financials of his clients' situations. He thinks about the lives they are living because of them.

Ready to take your business to the next level? Tune in to the ActionCOACH Podcast for practical advice, expert insights and actionable strategies to help you overcome challenges, unlock growth and achieve your business goals. Whether you’re looking to become a better leader, build a stronger team or boost profitability, discover the ideas and inspiration to move your business forward. 

Listen to the latest ActionCOACH UK Podcast here