What to Consider Before You Sell Your Business and Retire

From a leadership standpoint, it also can be valuable to outline your current role in the company. Then look for ways to step back. “This way, it doesn't look to a buyer like you're too involved,” says Jason Hartman of Palm Beach, Florida, who sold his real estate brokerage to Coldwell Banker in 2005. Check that important equipment like the software necessary to keep the business going is easy for the buyer to take on.

For the two to three years prior to selling, “don't put personal expenses through the business,” Hartman says, if you currently do so. You may lose the tax benefits, but potential buyers will be able to gain a clear view of the business operations.

Think about your life after you sell

Business owners frequently dedicate 60 to 70 hours a week to working, and stepping away from that can be an abrupt change. Those hours at the office might be replaced by trips, vacations in a second home or a new philanthropic pursuit. “It's a matter of understanding and building out a schedule of what you'll actually spend and how you'll live,” Guth says.

This exercise can be eye-opening. Guth worked with one client who sold his company and wanted to travel extensively during the first three years of retirement, but travel costs can quickly add up. Part of the planning process for this client included researching airline tickets and hotel prices. Understanding the cost of your new schedule and activities can help determine the amount needed to fund the retirement lifestyle you want.

There's an emotional component at play as well. More than three-quarters of business owners who sell end up unhappy within 12 months, according to the Exit Planning Institute. For many, “so much of their life and time was committed to the business that finding their purpose and calling post-owning the company is very hard,” Guth says.

Finding a new passion is key to matching your budget with satisfaction. For Ruppen, the wine lounge owner, that new activity centered on the friendships he made while owning the bar. “I have planned wine trips all over the world and take 10 to 15 people on personalized journeys that expose them to new wines, new cultures and new places,” he says.

Don't overlook your family

When Frank Fiume, 51, founder of i9 Sports, the largest youth sports franchise in the country, decided to sell, he still loved the business. But at the same time, he felt pulls in other areas of his life, including family. “My wife and I were turning 50 and we didn't want to live with regrets,” he says. While the company was still seeing double-digit growth, Fiume sold it first to employees as an ESOP (employee stock ownership plan) and then two years later to a private equity firm. The result was an all-around win: Through the process, Fiume stayed on the board of directors and kept a share in the company so he could continue to be involved. At the same time, he and his wife were able to redesign their lives, and Fiume wrote a memoir and business book, Running With My Head Down. “I did things I never thought I would do,” he says.

In addition to including family in your personal plans, you'll want to keep discussion lines about the company's future open. If you plan to have a child involved in the business after the sale, you may decide to pass off certain duties over time. At the same time, you might opt to move the business completely away from the family's involvement. Fewer than 30 percent of family businesses survive into the third generation.

Although expressing your viewpoint may not be an easy task, the effort can be worthwhile. The discussion may smooth over anxieties or worries about what will happen next. Furthermore, it can help pave the way toward stronger ties. “The most important things are friends and family, and having a purpose,” Craig says.