How Soon Can You Walk Away After Selling Your Business?
You may earn more money from the sale of your business if you stay to help with the transition to new management. The question is, do you need to?


Too often, a business owner opens their mind to a sale when they’re ready to retire. Too late! Business sales are often structured with a lump sum upfront and some sort of retention bonus or earnout on the tail end.
If you’re selling because you want or need to retire today, you’re likely to miss out on the full value of your baby.
Most businesses sell between four and seven times earnings. But I’ve seen some sell for a one times multiple and some sell for a 10 times multiple. Most leadership transitions are between six and 24 months.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
But I’ve seen some that were immediate, and in the wealth management business, I’ve seen some as long as five years. And I certainly haven’t seen it all.
Here, I highlight what’s typical and what could impact where you fall in that average range.
Type of business
Simple. Think e-commerce operations with straightforward business models or small businesses like your local chain of dry cleaners or car washes. Companies like this are more dependent on operational continuity than they are on the relationships of the founder. People may know you and like you, but if you sell, they’re happy if their car and clothes keep being returned clean.
Complex/regulated. Of course, businesses are not simple or complex. They fall somewhere on the spectrum. For the purposes of this column, I’ll highlight highly regulated businesses as well as technical businesses. Think pharma, biotech or financial businesses. In the case of the financial business, the retention of the end client is also key, which would be a reason to stretch out the transition.
Type of buyer
Strategic. Strategic buyers are already in your business or an adjacent business. They often have management teams and operational processes that can run the business day-to-day. For that reason, transitions tend to be shorter. That said, like the financial business example above, the more relationship-based the business, the longer the transition.
Financial/private equity. These firms are doing a few things: They are buying cash flow, finding efficiencies (sounds nicer than it is) and driving earnings to increase the multiple. They are often operating on four- to seven-year timelines and will keep the leadership team in place if it benefits the bottom line.
Employee stock ownership plans. ESOPs carry less financial motivation and more of a desire from the owner to leave a legacy or have the company live beyond them. Therefore, slower transitions are typical.
Are you ready (and able) to move on?
But the most important factor is likely to be the first one I mentioned: The desire of the business owner to exit. The faster you head for the door, typically, the more money you leave on the table. But you may not care.
We tend to think of money as a tool, and if you have enough tools in the shed to do the job (i.e. maintain your lifestyle), why would you keep working just to accumulate more?
I recently listened to an interview with the founder of Loom, who estimated he left about $60 million on the table by leaving during the earnout. Guess what: He already had plenty of tools and was ready to move on.
We rely on financial planning software to figure out that part. You can access a free version online.
Related Content
- Financial Planning for Small Business Owners
- For Business Owners, Estate and Exit Planning Join Forces
- The Four Worst Mistakes to Make When Selling Your Business
- The Most Important Number for a Business Owner Considering a Sale
- Business Owners: How to Calculate Your Wealth Gap in Five Minutes
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

After graduating from the University of Delaware and Georgetown University, I pursued a career in financial planning. At age 26, I earned my CERTIFIED FINANCIAL PLANNER™ certification. I also hold the IRS Enrolled Agent license, which allows for a unique approach to planning that can be beneficial to retirees and those selling their businesses, who are eager to minimize lifetime taxes and maximize income.
-
Eight Ways To Save on Your Next Luxury Trip
Looking for ways to stretch your retirement dollars? Follow these tips to get a deal on your next vacation.
-
Donating Complex Assets Doesn't Have to Be Complicated
If you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
Donating Complex Assets Doesn't Have to Be Complicated
If you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
What's Next for Stocks After a Chaotic Spring
A chaotic tariff policy buffets investors looking for clarity on the economy and inflation.
-
Think a Repeal of the Estate Tax Wouldn't Affect You? Wrong
The wording of any law that repeals or otherwise changes the federal estate tax could have an impact on all of us. Here's what you need to know, courtesy of an estate planning and tax attorney.
-
In Your 50s? We Need to Talk About Long-Term Care
Many people don't like thinking about long-term care, but most people will need it. This financial professional recommends planning for these costs as early as possible to avoid stress later.
-
Where to Invest in an Uncertain Market
In an uncertain market, you can still pocket juicy payouts ranging from 4% to 14%, depending on risk.
-
My First $1 Million: Events Industry CEO, 65, Northern New Jersey
Ever wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
Social Security Pop Quiz: Are You Among the 89% of Americans Who'd Fail?
Shockingly few people have any clue what their Social Security benefits could be. This financial adviser notes it's essential to understand that info and when it might be best to access your benefits.
-
Stock Market Today: Investors Look on the Bright Side
A generally good week closes on another positive note, as investors, traders and speculators look for fresh catalysts.