Your Business is Part of Your Retirement Plan

Jenna VanLeeuwen sitting on a bench in front of a coffee shop

Many business owners plan to fund at least some portion of their retirement plan through an exit and monetization of their business. This leads a lot of business owners to stress about finding the perfect time to sell their business so they can get the most value from their investment as possible. That makes sense! But it leads to a lot of stress about timing, buyers, market, and adds pressure as they get closer to their exit plan needing to become a reality. 

What I recommend is starting your exit plan and retirement strategy years before you are considering your exit. If you know your number, i.e. how much you’ll need to live comfortably during retirement, then you know your benchmark for the value you’ll need to get from your business. This then serves as your guidepost for business decisions. You’ll want to work and mold your business to create the value you need. 

What’s Your Number?

Your number is what you need each month to cover your needs and enable you to lead a fulfilling life. Your number takes into account your lifestyle, your goals, your dreams, and your plans for the future. 

If you want to read more of my thoughts on reflecting to find your number, check out my article “How Much Money Do You Need to Be Happy?”

For finding your retirement number, let’s break it down into a few categories: 

Early Retirement: What will be most important to you when you are newly retired? Will you want to travel? Spend more time with family? Will you start another business or want to work in some capacity? 

• Getting Older: What do you want your life to look like as you get older? Where will you live? What kind of personal and medical care will you want to afford? How will you spend your time? 

• Your Legacy: What will your legacy be? Do you want to be able to help your children and grandchildren? Do you want to leave assets to a philanthropic cause? 

After you’ve reflected on what you want out of your life after retirement, you can start to work through how much that ideal retired life will cost. How much money will you need to make it happen? 

That’s your number. 

Once you know your number, you will want to make business decisions that help your business grow towards that value. Will you need to change your business to attain that goal? 

Increase the Value of Your Business 

Most business owners are focused on long-term growth, and their planning goes into keeping a steady growth of the business at top of mind, even if it’s not immediately profitable. 

Creating value in a business takes a new mindset. Instead of long-term growth in trade for short term costs, it’s time to position your business as attractive to a potential buyer. Just like when you list your home for sale, you want to be sure that the paperwork is in order, renovations are complete, and you are organized and ready to sell. You’ll focus on profits and getting everything else organized and ready for a seamless hand-over. 

You’ll need to address different aspects of your business to get top value: 

• Prioritize cash flow – Reduce expenses wherever possible.

• Increase profitability- Work on improving your margins and increasing revenue. 

• Lower  business risk – Diversify your revenue streams and create recurring revenue streams.

• Get operations in order – Make sure your systems in place for payroll, inventory management, and so on are functional and efficient. 

• Build a high-quality team with low attrition– If you can, offer quality benefits like retirement plans and stock options. 

• Review your marketing –  Are there places to make sales and marketing more efficient? Are you following a formal marketing plan? 

• Organize your books – Your financials need to be in perfect shape for sale. 

How can you do all this while you run your business? The short answer is, you can’t. Typically this happens in a fairly short time frame as you work to sell your business. Even if you had the skills and expertise to do all of the things you need to do in order to grow your business value, you likely will not have time to accomplish them as you try and make the sale. That means it’s a perfect time to bring in outside expertise.  

Assembling Your Team 

The best way to get all this done is to build a team that can help you work through things systematically.  This includes expert accountants, financial planners, business consultants, and attorneys that can help you navigate the transition.

Your business is one of the primary sources of your wealth. It makes sense to invest in a trusted advisor that specializes in transitioning business owners to liquidity. You want to always be making decisions based on your long-term wealth.


If you know you’ll sell your business to fund your retirement, you need to know your number so that you can work towards creating the value needed to live a fulfilling retirement. Working with a financial advisor and team of professionals can help you maximize your business value and successfully navigate your exit. 

This work is powered by Advisor I/O under the Terms of Service and may be a derivative of the original.

Sign up for our newsletter