Ask a business owner what their retirement plan is, and a common answer is some version of “I'll sell the business.” It's an understandable position — the business is often the largest asset an owner has — but treating it as the retirement plan, rather than one part of a retirement plan, carries more risk than most owners have fully priced in.
Why “I'll Sell the Business” Isn't a Plan on Its Own
A business's value at the point of sale depends on market conditions, buyer interest, the business's performance in the years leading up to the sale, and factors entirely outside the owner's control — none of which are guaranteed to align with when the owner actually wants or needs to retire. Owners who need to sell on a specific timeline, rather than an opportunistic one, routinely accept lower valuations than they would have gotten with more flexibility.
The Concentration Risk Most Owners Underweight
Financial advisors generally caution against having any single asset represent an outsized share of someone's net worth, for the simple reason that all the risk sits in one place. Business owners often violate this principle by default, simply because the business grew to represent most of their wealth over time — not because they made an active decision to concentrate risk that heavily.
Building Retirement Savings Independent of the Business
The practical fix isn't complicated, even if it requires discipline: building retirement savings — registered accounts, investment portfolios, other income-producing assets — that exist independently of the business's eventual sale value. This does two things. It reduces how much of retirement depends on a single, uncertain future event, and it gives an owner genuine flexibility about when and how they eventually exit the business, rather than being forced into a sale on someone else's timeline.
Where This Fits Into a Broader Financial Plan
This is really a business succession question and a personal financial planning question at the same time, and the two are easiest to solve together rather than separately — because decisions about how much to reinvest in the business versus draw out for personal savings affect both sides of the equation simultaneously.