Planning your succession
How to retire from your own business
Retiring from a business you own isn't like retiring from a job. Someone has to take over, your employees and customers need continuity, and much of your retirement may depend on what the business is worth. The owners with the most choices are the ones who plan early.
Your options
1. Hand it to family
Ideal when a family member wants it and is ready. Many owners find their children have built different lives.
2. Sell to employees or a manager
Keeps continuity, but employees often can't afford to buy outright without seller financing or a structured plan.
3. Sell to an outside buyer
Private equity, competitors, or individual buyers through a broker. This can pay well, but you have little say in what happens to your people and your name afterward.
4. Close the business
Usually the least valuable option. You typically get only what the equipment and inventory are worth.
5. A planned succession to a new owner
A capable successor joins, learns the business alongside you, and buys it in stages over several years. You're paid over time, largely from the business's earnings, and you step back on a schedule you agree.Here's how it works.
Start earlier than you think
A good handover takes years, not months. Starting early gives you time to make the business less dependent on you, which also raises its value, and to find and train the right person. It also means you can step back gradually instead of all at once.
A simple first-year checklist
- Decide roughly when you'd like to step back, and how involved you want to stay.
- Get a sense of what your business is worth. Try our free estimate.
- Talk with your accountant about taxes and with an attorney about your options.
- Write down what you want for your employees, customers, and community.
- Start handing off day-to-day decisions so the business can run without you.
Common questions
Can you retire from your own business and still own it?
Yes. Some owners hire a general manager and keep ownership, taking profits as income. It works best when the business truly runs without you and you're comfortable with the risk of leaving your wealth tied up in it. Many owners eventually prefer to hand ownership on and be paid for it.
How do business owners fund their retirement?
For many owners the business is their largest asset, so the sale or handover is a big part of retirement income. If you're paid over several years in a phased buyout, those payments can become a steady income stream. Your financial planner and accountant can help you plan around them.
How many years before retiring should I start planning?
Three to five years is a good rule of thumb, and more if the business depends heavily on you. A gradual handover alone often takes several years from start to finish.
What if my children don’t want the business?
That's very common. You can still keep the business going by handing it to a manager, an employee group, or an outside successor who wants to run an established business. See our guide to passing a business to the next generation.