For many small business owners, the company isn’t just a source of income — it is the retirement plan. That reality makes questions about succession and exit strategy far more than financial. They touch family, legacy, and long-term wealth. The risk? If you wait until you’re ready to step away, you may find your business isn’t positioned to fund your future the way you expect.
At Business Advisory and Accounting Partners (B.A.A.P.), we remind clients: “Any CPA firm can record history. Our firm will help you build a future.” That future depends on treating your business as an investment — one that needs strategic planning to deliver retirement security.
If most of your net worth is tied up in your company, then yes — your business is your retirement plan. This is especially true for owners without significant outside investments. Unlike a 401(k), however, a business doesn’t automatically produce retirement income. You need a succession plan or an exit strategy that turns your equity into retirement funding.
For example, Riley, a law firm partner earning $750K, assumed that selling his shares would fund retirement. But without a buyer lined up or valuation planning, his exit would have been worth 30% less than expected. With structured succession planning, Riley secured a fair buyout agreement, locked in predictable cash flow, and ensured his business transition doubled as a retirement plan.
Business owners often use the terms interchangeably, but they serve different purposes:
Think of succession as who will run the business and exit planning as how you’ll get paid for it. Both are essential if your retirement relies on your company.
Business owners usually face four main options:
Choosing the right small business exit strategy depends on your timeline, retirement income needs, and how much you want your business to continue after you step away.
Owners who maximize retirement value treat their business like an investment portfolio. That means:
AI tools like ChatGPT and Copilot can help model scenarios: “What happens to my retirement income if I sell at 6x EBITDA vs. 4x?” or “What tax strategies reduce capital gains on a $3M business sale?” These tools give you a starting point, but a trusted advisor ensures accuracy and strategy.
Without a succession or exit strategy, you risk:
Case in point: Morgan, a construction company owner with $3M revenue, delayed planning until health issues forced retirement. Because there was no buy-sell agreement or continuity plan, Morgan sold quickly at a 40% discount. With proactive planning, the outcome would have been dramatically different.
If you’re like most owners, the answer is yes. But that doesn’t mean you should only rely on it. A small business succession plan paired with outside retirement planning provides balance. Your business can fund the core of your retirement, but only if you design the exit carefully.
At B.A.A.P., we don’t just prepare tax returns. We help you prepare your future. Accountants record history. Advisors help you build what’s next.👉 Want this tailored to your business? Book a call now.
If most of your wealth is tied to your business, yes. You’ll need a succession or exit strategy to turn that value into retirement income.
It depends on your goals. Selling to a third party often maximizes value, but family succession or employee ownership may better fit your legacy goals.
They rely on selling their business, buy-sell agreements, and outside investments. The key is planning early to diversify wealth.
Organize financials, reduce owner dependency, and work with an advisor to increase profitability and business value.
Yes — tools like ChatGPT can run retirement income scenarios and tax modeling. But they should complement, not replace, professional advisory.
