Question:
Having owned a successful consulting business for 20 years, I’m starting to think about selling it and retiring. Do you have some advice about making this big decision, especially about the timing?
A: First, congratulations on your success! Business ownership takes planning, focus and perseverance. It’s smart to plan your exit as well. Owners who plan early typically have greater flexibility, stronger negotiating power and a smoother transition for employees, customers and themselves.
There is no perfect time or magic age — the decision to retire and/or sell a business is an individual one. And it’s also not “just about money.” Retirement or selling a business has financial and emotional aspects.
I can offer one caution: Business owners often wait too long because their identity is tied to the company. Instead, start planning early. Three to five years is often considered the ideal runway because it gives owners enough time to improve value, build strong systems, reduce risk and make thoughtful decisions. To help gauge timing, ask yourself some questions:
- Assess your energy. Are you still energized by leading and growing the business? Do you still have the physical and emotional energy the business requires, or are you staying out of obligation or pride? Are you focused on the future of the company, or mostly maintaining what already exists?
- Total readiness. Could the business continue successfully without your daily involvement? Are your financial records, systems and leadership team prepared for a transition? Do you have a personal retirement or post-sale plan? Will you have enough funds to achieve your personal goals? What would you regret more: leaving too early or waiting too long?
- The shape of things. Is the business showing consistent growth, profitability and stable customer relationships? How dependent is the business on you personally for sales, operations or key connections? If a buyer looked at your business today, would they see opportunity, stability and clear systems in place?
- Take steps to create more value, smoothing a stronger transition. Assemble accounting, legal, financial and business advisers early to help avoid costly mistakes. Build a personal financial plan and set clear goals for the next chapter. Strengthen recurring revenue and customer relationships. Develop leadership to reduce owner dependence — a business that relies entirely on the owner is harder to sell. Understand the business’s value by investing in a professional valuation that focuses on opportunities for the next owner. Review contracts, leases, licenses and legal documents before going to market.
Central Oregon Community College’s Small Business Development Center offers free, confidential professional business advising and a variety of low-cost courses to help entrepreneurs through the business lifecycle: cocc.edu/sbdc.
About the Expert:
Newly retired herself, Sue Meyer brings decades of small business ownership, teaching, and advising experience. She is proud to have spent years working alongside the skilled team of business advisers at COCC’s Small Business Development Center
All SBDC business advising is free of charge and confidential. Please note, however, that it cannot substitute for legal or tax advice.
