Should I sell my business and retire?

If you are asking whether to sell and retire, the first thing to settle is whether the sale is meant to fund your retirement. BDC describes selling as potentially your largest-ever financial transaction, and as one of your most consequential business decisions. This page does not say whether you should sell or retire. It lays out what published sources say about the planning behind that decision, so you can ask better questions of your accountant and lawyer.

The sale as a retirement plan

The Canadian Federation of Independent Business notes that most entrepreneurs don’t have pensions and rely on the ultimate sale of their business, together with the protection of the lifetime capital gains exemption, as their retirement plan. If that describes you, the price, the terms and the tax treatment of the sale carry much of your retirement income. Ask your accountant to model the after-tax proceeds, rather than relying on an asking price.

Finding someone to take over

CFIB research found that finding suitable successors remains the most significant barrier, that formal succession planning remains uncommon, and that many owners face challenges navigating complex financial, legal, tax and valuation considerations. A retirement date that depends on a buyer appearing is therefore worth testing early. Ask how long a sale of a business like yours could take, and what you would do if no buyer comes forward.

Leaving on your own timetable

BDC notes that if a CEO steps down, retires or leaves the business, sometimes unplanned, a significant change occurs, and that the sudden departure of a CEO, owner or other key employee can be highly disruptive to a business. It also says planning means your successor can meet key clients and ensure they stay loyal to the company. How do I plan to retire from my business and hand it over? walks through that planning.

Retiring without selling outright

Selling to a third party is not the only route. For an owner-CEO, BDC lists a family member taking over the position and an internal transfer to someone on the team alongside a sale. Stepping back from day-to-day work while keeping your ownership is another option to ask your advisers about. That raises different questions about control and income, covered in Can I retire and keep owning my business?.