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How and When to Gracefully Retire 

Retiring as a small business owner can be a complex and oft emotional process. Transitioning away from a company that you have dedicated your time, money, and self to building is a major life change–one that comes as a relief to some, but may feel like a loss to others. Navigating such bittersweet departures gracefully will pose unique challenges, both logistically, interpersonally, and mentally. With careful planning and consideration, you can retire on your own terms and ensure that your business continues to thrive even in your absence.


  1. There is no one-size-fits-all answer to the question of when you should retire as a small business owner. A variety of factors–including your age, financial stability, and personal or professional goals–influence when and how business owners begin the process of retirement. Many people choose to retire in their 60s or 70s, in keeping with traditional retirement timelines, while some opt to continue working well into their 80s. Others take a phased approach to leadership transitions, selecting mentees and training them to assume ownership or active leadership, while still overseeing the business as a whole to ensure successful transition.
  2. One of the most critical factors to consider is whether you have reached financial independence. In order to retire comfortably, you must have amassed enough savings, investments, and passive income streams to support yourself and your family without relying on your business for regular income. Developing an investment strategy early on can ensure your continued financial stability, provided the investments are sound and you are not singularly reliant on them as a source of capital gain.
  3. Assess your personal goals and motivations, both professionally and interpersonally. Whether you endeavor to travel the world, or spend your retirement focusing on quality time with family, retiring early affords you more time for these ambitions–but each comes with its own set of financial demands. Many people, however, find that transitioning from full time business ownership to part time is more satisfying than full retirement, as it keeps them cognitively sharp, physically active, and maintains a more consistent revenue steam to support them in their later years, when working is no longer an option.


Whether you retire partially or entirely, planning your exit strategy in advance and accounting for all potential variables is key. The following steps will ensure your transition into retirement is as smooth and successful as possible.

  1. Create a succession plan:                                                                                               A succession plan entails transfer of ownership from you to a successor. This plan should include details such as how the transfer will be financed, what role you will play in the transition and how active you will be in overseeing the transition, potential restructuring of workplace hierarchies, how these changes will impact your employees, and contingency plans for potential situations in which the aforementioned may not work out as initially planned.
  2. Find a successor:                                                                                                         Your successor may be a family member, employee, or external buyer–but take care to make this decision pragmatically and not emotionally, while you may want to set your children or other relatives up for success by passing your business down to them, it is wise to consider whether or not they are truly the best candidate.If you plan to transfer ownership of your business to a family member or employee, it is important to start the as early as possible, which will afford you both time to prepare for this transition. Your successor will need to be trained extensively on both the ins and outs of the business as well as how to manage effectively. It may be prudent to require your successor to take business classes in preparation. If you plan to sell your business, consider working with a business broker to find a buyer who is a good fit for your company.
  3. Communicate these changes to your employees:                                             Your employees are the backbone of your business–without their labor, your business would cease to exist. Regardless of how intimately you work with your employees prior to this transition, it is crucial to maintain an open and honest dialogue with them regarding any future transitions in power or restructuring of hierarchical structures or other changes to their employment such as insurance changes, changes in management, or other relevant information. This will help to minimize uncertainty and ensure that they are knowledgeable of and prepared for any changes that may come with the transition.

Once you’ve carefully considered these points and developed your retirement plan, you can begin the process of transitioning out of a leadership role and into full or partial retirement with peace of mind and confident footing. 

Felix A. Woelber Felix is an Alaskan born author, academic researcher, multi-media artist, and former educator. They enjoy writing about socio-economics, public policy, and creating education resources.
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