Selling Your Business to Retire: What You Need to Know
- Mark Hartmann
- Mar 25
- 7 min read
You’ve built your business over decades. You’ve weathered economic cycles, made tough calls, and grown something valuable—something that’s part of your identity. But now, after 15, 20, even 30 years, you’re thinking about what’s next. You’re ready to retire.
For many owners, this is one of the most pivotal decisions of their lives. And while the idea of retirement may sound appealing, the process of selling a business often feels daunting. Uncertainty, concern for employees, legacy worries, and fear of leaving money on the table are common and understandable.
The good news? You don’t have to navigate this alone. With the right guidance and a clear roadmap, you can transition out of your business on your terms—with confidence, clarity, and peace of mind.
In this article, I’ll walk you through what you need to know to sell your business for retirement. We’ll cover timing, valuation, preparation, common pitfalls, and how to structure a sale that protects what matters most to you.
1. Understand That Selling Is a Process, Not an Event
Selling your business isn’t like selling a house. It’s not a matter of slapping a price on it and waiting for offers. It’s a complex, multi-phase process that often takes 9–18 months from planning to close—and that’s assuming your business is ready to sell.
This process includes:
• Valuation and financial preparation
• Identifying and qualifying buyers
• Marketing the business confidentially
• Negotiating price and terms
• Due diligence
• Finalizing legal documents and closing the deal
Each phase involves careful strategy, professional coordination, and expertise. Trying to go it alone, or even hiring the wrong type of advisor, can lead to costly mistakes.
Takeaway:
Start early. Even if you don’t plan to sell for another year or two, begin preparing now. The more time you give yourself, the better your outcome will be.
2. Get Clear on Your Goals for Retirement
Retirement isn’t just about the number in your bank account. For many business owners, it’s also about what they’re retiring to. Before beginning the sales process, take time to reflect on what a successful transition looks like for you.
Ask yourself:
• How much money will I need to retire comfortably?
• Do I want to preserve my legacy or keep the business name intact?
• What’s important to me regarding employees or the buyer’s plans?
• Would I consider staying on part-time for a transition period?
• What do I want my life to look like after the sale?
Your answers will shape the kind of deal you pursue—and the kind of buyer who’s the right fit.
3. Know What Your Business Is Really Worth
One of the most common questions I get from business owners is: “What’s my business worth?”
There’s no simple formula or online calculator that can answer that accurately. Valuation is nuanced and depends on many factors, including:
• Historical and projected financial performance
• Industry and market conditions
• Quality of management and systems
• Customer concentration
• Recurring revenue or long-term contracts
• Owner involvement in day-to-day operations
In the lower middle market (businesses worth $1M–$25M), businesses are typically valued as a multiple of EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), adjusted for non-operating or one-time expenses. That multiple can vary depending on your business’s risk profile and attractiveness to buyers.
Tip:
A professional valuation—or at minimum, a broker’s opinion of value—can give you realistic expectations and help you make informed decisions. It’s also a powerful tool when negotiating with buyers.
4. Prepare Financially, Operationally, and Mentally
Buyers are looking for businesses that can succeed without the owner. If your business is overly reliant on you, or if your records are disorganized, it will hurt value and discourage serious buyers.
Here’s how to prepare in three key areas:
Financially:
• Clean up your financials. Make sure P&Ls, balance sheets, and tax returns are accurate and consistent.
• Eliminate personal expenses running through the business.
• Document add-backs clearly (non-recurring or owner-specific expenses).
• Work with a CPA to ensure everything is audit-ready.
Operationally:
• Reduce reliance on you. Delegate responsibilities and develop second-tier leadership.
• Systematize key processes and document them.
• Lock in customer and vendor contracts where possible.
• Upgrade technology or infrastructure that may be outdated.
Mentally:
• Start separating your identity from the business.
• Plan what’s next—whether it’s travel, volunteering, family, or a new venture.
• Prepare emotionally for the transition—it’s a big life change.
5. Protect Confidentiality
Unlike selling real estate, you can’t advertise your business openly. If employees, customers, or competitors find out too early, it can cause real damage.
That’s why working with a professional business broker or M&A advisor is so important. An experienced advisor will:
• Market the business confidentially
• Pre-screen and vet serious buyers
• Require non-disclosure agreements (NDAs)
• Handle inquiries and communications discreetly
The goal is to create interest and competition—without jeopardizing your business.
6. Understand Deal Structures (It’s Not Just About Price)
Most business sales are not all-cash, walk-away deals. Especially in the $1M–$25M range, deals are often structured to balance risk between buyer and seller.
Common components include:
• Cash at close – The lump sum you receive at closing
• Seller financing – You carry a note for part of the price (typically 10–20%)
• Earn-outs – Additional payments tied to future performance
• Employment or consulting agreements – You stay involved short-term to assist with the transition
A good advisor will help you negotiate not just the price, but also the terms—and those terms can make or break your outcome.
7. Know Who Your Buyer Might Be
Buyers come in many forms. In the lower middle market, the most common are:
• Individual buyers – Often former executives or entrepreneurs looking to run a company
• Strategic buyers – Competitors or companies in related industries
• Private equity groups (PEGs) – Investment firms seeking platform or add-on acquisitions
• Search funds – Investor-backed individuals looking to buy and operate a business
Each buyer type has different goals, timelines, and resources. The right advisor will help you identify the best fit based on your goals and the business’s profile.
8. Plan for Due Diligence
Due diligence is where deals are won or lost. It’s the buyer’s deep dive into your financials, operations, contracts, HR, compliance, and more.
Expect this phase to be intense and time-consuming. It typically lasts 30–90 days and involves hundreds of questions and document requests.
Preparation is key. You’ll need:
• 3–5 years of financials and tax returns
• Customer and vendor contracts
• Lease agreements
• Employee records and policies
• Corporate documents (LLC/Inc. formation, bylaws, etc.)
• Documentation of intellectual property, licenses, etc.
If something is missing or incorrect, it can delay or derail the deal. A good advisor and M&A attorney will help you anticipate and navigate this stage effectively.
9. Assemble the Right Team
Selling a business is not a DIY project. You’ll need a team of experienced professionals working in sync to protect your interests. Key players include:
• M&A Advisor or Business Broker – Guides the process, finds buyers, negotiates deals
• Transaction Attorney – Drafts and reviews legal documents specific to M&A deals
• CPA or Tax Advisor – Assesses tax implications, helps with deal structure
• Financial Advisor/Wealth Manager – Plans for your financial future post-sale
Choose professionals with specific experience in business sales—not just generalists. Your cousin’s divorce attorney isn’t the right fit here.
10. Maximize Value—and Peace of Mind
At HartmannRhodes, we specialize in helping business owners like you sell with confidence. As someone who built, grew, and sold my own Inc. 5000 business, I understand both the emotional and financial weight of this decision.
Our process is designed to:
• Uncover and highlight the true value of your business
• Position it strategically to the right buyer pool
• Manage the deal process from start to finish
• Advocate fiercely for your goals, your legacy, and your peace of mind
You’ve spent decades building your business. Now it’s time to transition on your terms—with expert guidance, a clear plan, and the best possible outcome.
Final Thoughts
Selling your business to retire is one of the biggest decisions you’ll ever make. It’s normal to feel a mix of excitement, anxiety, and uncertainty. But with the right preparation and the right partner, it can also be one of the most rewarding chapters of your life.
Remember:
• Start early
• Get clear on your goals
• Know your value
• Prepare thoroughly
• Protect confidentiality
• Structure your deal wisely
• Work with experienced professionals
If you’re thinking about selling—whether this year or a few years down the road—let’s talk. I’d be happy to give you a confidential, no-obligation assessment of where you stand and what’s possible.
You’ve done the hard part. Now, let’s make sure the exit is just as successful.
Interested in learning what your business might be worth and what steps to take next? Contact me for a confidential consultation.
Blog: Selling Your Business to Retire: What You Need to Know
Mark Hartmann is a former business owner turned M&A advisor who knows firsthand what it takes to build, grow, and sell a successful company. A three-time Inc. 5000 CEO, Mark did just that before navigating its eight-figure sale—giving him a rare perspective that sets him apart from most brokers. Today, he helps owners of companies valued between $1M and $25M plan and execute smooth, profitable exits.
Mark understands that selling a business isn’t just a financial decision—it’s personal. That’s why he works closely with owners to protect their legacy, maximize value, and make the transition on their terms. He holds an MBA from Eastern University, a Master’s Degree in Organizational Change Management from St. Elizabeth University, and a Graduate Certificate in Executive Coaching from Columbia University. Some of his professional credentials include Certified Mergers & Acquisitions Professional (CM&AP), Certified Business Intermediary (CBI), Certified Exit Planning Advisor (CEPA), and Certified Value Builder (CVB).
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Partner with HartmannRhodes, expert business brokers and M&A advisors, to navigate your business sale with precision—maximizing value and ensuring a smooth transition. Reach out for tailored business sale strategies. Contact us today!
