When entrepreneurs sell their businesses, it is a time of mixed emotions. There is often sadness over the sale of the business, but excitement of a new beginning. In addition, there is typically a financial windfall that raises additional questions.

The first tendency is to put the money right back into another venture. I get it. That's what they know. They tend to be risk takers and are thrilled with the opportunity to build another business.

But first things first. They need to take a look at the financial windfall and try to make some intelligent decisions. Let's look at one client example.

The client is a married business owner, mid-30s, with two kids. The business sale nets the owner $3 million in cash. The owner had shares of stock in a C corporation that was held for three years. We will assume that the owner had no basis in the stock (a more complex issue so just stay with me). Accordingly, the entire amount is taxed as capital gains.

There are plenty of tax and financial questions. My job as a CPA is to educate people and, ultimately, they will make their own decisions.

1. What are the taxes?

Obviously, this is the first issue to address. It is now time to share some of your windfall with the government. Let's take a look at how much.

First of all, there will be capital gains of 20 percent, net investment tax of 3.8 percent, and possibly some alternative minimum tax (AMT).

But don't forget state taxes. There are seven states that don't have an income tax. The rest of the states have taxes as low as 2 percent on up to 13.3 percent (thanks a lot California).

So let's assume that combined federal and state taxes are 30 percent. That equals $900,000 of the $3 million. The first step is to set that money aside and try and figure out what to do with the remaining $2.1 million.

2. Have some fun

Now that we have set aside the tax money, it's time to play a little. I think it's important in life when you have a nice windfall to freely spend a small portion of it.

Some clients resist this. Some go overboard. Depending on the person and the amount, I recommend taking 5 to 10 percent and having some fun.

Maybe you always wanted a classic Corvette? Maybe you always wanted to charter a private yacht and travel the Greek islands? Whatever your dreams are this is a good chance to take advantage of it. Let's assume in this example it's $100,000.

Sometimes clients who don't spend a little money upfront regret that they never "enjoyed" their money. Now is the time.

3. Emergency funds

People often speak of emergency funds at lower income levels. But wealthy people need emergency funds as well. Why? Because the more money they make the more they tend to spend. I have clients who make $1 million a year and spend every penny of it (and then some).

I want to make sure that my client has ample funds set aside so they can live a comfortable lifestyle for at least a year. This can also help alleviate a little stress. This amount will vary depending on where the client lives. But let's assume this is $200,000.

4. Decide the risk tolerance for investments

Many entrepreneurs have never met a financial planner. Again, they tend to be risk takers and not ones to put themselves into conservative investments.

But even if they assume they're going to put a lot of their funds back into a new business start-up they still may have a time frame of a few years. In the meantime, it may make sense for them to review a conservative asset allocation. They have to understand their risk tolerance to investments other than those of private companies.

5. Sleeping at night

Clients have their own comfort zones. At the end of the day the most important thing is that they sleep at night. All I can do is discuss their options and help them make sense of it all. They need to find a financial strategy that works for them.

So in this example, here's what my client ending up doing. He allocated $900,000 for taxes, $100,000 in play money and $200,000 in emergency funds. This left him with $1.8 million. With this remaining amount he built a conservative portfolio with the goal of using some of the funds for a new business venture.

I think the client has made some good decisions based on his situation. He has weighted the options and considered what is best for him and his family. Most importantly, he is sleeping well at night.