As a successful business owner who eventually plans to retire, you need to think about succession options. You have several to choose from, with each option having its own benefits and drawbacks.
What you choose will depend on your personal wishes for the business, your means and your desires.
Selling your business
Fit Small Business discusses a few different ways to transfer business ownership. Most include some form of selling your share of the business. For example, you may sell to a co-owner or key employee. In either case, you have worked with the future owner yourself. You know their personality and work ethic. You can tell if they will remain a good fit for the company moving forward. But not all people in these positions wish for the burden of full ownership. Some cannot even afford the sale.
In that case, you can sell your share back to the company itself. This works if your business has multiple owners, as the owners can split up your share among themselves. This is a good option if they do not need a person to fill your shoes and share the workload.
You can sell to an outside party, too. Though this ensures you get paid appropriately, it takes control out of your hands. You no longer know anything about the future owner(s). Thus, you cannot gauge your business’ growth in the future.
Passing it down the family line
Another option is to pass ownership interests to a family member. This allows you to avoid the hassle of buying or selling shares. You know your family members well, too. But they may not hold interest in carrying on the family business. Because of these factors, it is important to start looking into a succession method early. This gives you time to look for another way if your first choice does not pan out.