How Retiring Business Owners Can Achieve Their Ideal Exit (+ the Impact of 2025 Tariffs)

Selling your business and retiring as an owner is a significant process that can help you fund the next stage of your life while preserving your business and the legacy you built — but only if navigated correctly.

But when owners try to handle the sale on their own, they often run into frustrating M&A processes they’ve never navigated before: long exit timelines, unexpected costs, and valuation misalignments between what they think their business is worth and what buyers are offering. This leads to deals not closing or an owner accepting a deal that doesn’t give them the price and stewardship they were looking for.

Plus, with recent changes in economic policy, business owners now need to consider the impact of 2025 tariffs on their business’s valuation and their exit plan. For plenty of businesses — especially those that rely on manufacturing — valuations are likely to drop in the face of uncertainty around tariffs. This will lead to many owners re-evaluating their exit goals and looking for alternative exit structures to try and maximize their exit outcomes.

In this post, we cover how you can increase the chances of getting the exit you want, including:

• How to prepare your business for sale: This involves setting exit goals, solving operational gaps (such as eliminating key man dependencies), and optimizing your customer contracts.
• The benefits of working with an M&A advisor: An M&A advisor helps you navigate the entire M&A process. This includes accurately valuing your business for sale, crafting marketing materials towards qualified buyers, increasing buyer coverage, evaluating offers, handling negotiations, and structuring and closing the deal. Data shows that M&A advisors can increase the final sale price of your business by 6–25%.
• How current tariffs are changing the M&A landscape and how to stay on track for your retirement. With the volatile tariff economy, there’s a chance your business is going to be valued less due to the increased costs of goods. If this affects your business, there are several things you can do to try and mitigate this effect.

How to Prepare Your Business for Sale

When we surveyed investment banks and advisors within our network, 66% of them said that less than ¼ of the sellers are prepared to sell on their own.

Preparing your business for sale before taking it to market is necessary because it increases your chances of successful exit outcomes. You can help shorten your exit timeline by getting your business market-ready before working with an advisor.

Specifically, you want to:

• Define your motivations for selling and set exit goals
• Identify and act on any operational gaps
• Solve for any key man dependencies
• Strengthen your customer contracts

Define Your Motivations for Selling and Set Exit Goals

According to our survey, one of the key reasons why deals fall through is because the owner hasn’t clearly defined their exit goals.

Knowing your exit goals lets you strategically plan how to approach your sale. This includes things you should improve before going to market and the type of buyers you should target.

For example, if one of your goals is to find a strong steward — one that will preserve your business as it’s going forward, with minimal disruption to your existing operations — then you may end up targeting search funds. Search funds are generally operated by entrepreneurs who are looking to take over and operate small to medium-sized businesses. Their focus is on long-term stability, rather than quick growth, making them a great fit as a steward. To make your business attractive to search funds, you want to show recurring revenue, solve any key-man dependencies, and make sure your financials are in order. This is how setting exit goals helps shape your strategy.

When setting goals, think in terms of both personal goals and business goals.

• For personal goals, consider what you need financially to finance the next stage of your life. For retirement, this means the dollar amount you need to fund the lifestyle you want. You may want to factor in any family expenses, such as tuition for children or grandchildren.

• For business goals, what do you want to happen to your business? This applies to both your brand and legacy, as well as your existing customers and employees.

There’s generally a spectrum between price and stewardship. Often, though not always, buyers who offer a higher price will offer less in stewardship. Most business owners fall in the middle of the spectrum, wanting both a fair, competitive price and a good steward. By clearly outlining which goals are most important to you, you can be better prepared for negotiations where you might need to decide if you want to sacrifice on price or stewardship to close the deal.

Prepare for Due Diligence

When a buyer is interested in your business, they’re going to conduct due diligence. They’ll look closely at how your business operates, how much operations will be affected by your exit, and the financials to make sure your business is as described. Buyers generally want to see a good plan of continuity — that is, minimal friction when the ownership transfers from you to them.

You can save a lot of time and back and forth during buy-side due diligence by:

• Documenting all standard operating procedures: Often, business processes grow organically within a company. Your team learns what to do, and they just know when and how to do it. But this doesn’t help a buyer, especially if they want to scale your business or bring on new hires. Take the time to ensure you have documented processes that are easy to follow, helping ensure continuity after your exit.
• Verifying your financials are buyer-ready: For example, some businesses use cash-based accounting, but buyers may want to see accrual-based accounting to make it easier to evaluate company performance and value. You can also conduct a third-party Quality of Earnings (QofE) assessment to help you validate your financials, identify issues to resolve, and expedite due diligence for a smoother sale.
• Preparing for legal considerations: Ensure all legal issues are resolved, including compliance with relevant laws and regulations; securing patents, trademarks, and copyrights; and verifying that all necessary licenses are up to date.
• Remove key man dependencies: Also known as key person dependency, key man dependency is where a large portion of the business’s value is tied to one individual’s expertise, experience, or network. It’s a significant red flag for potential buyers, so your exit planning should include creating a clear plan to eliminate these dependencies.

Overall, you want to make yourself redundant as a business owner. Business owners often fill the gaps between unwritten processes or spend their time reacting to issues as they occur, but operations can’t keep relying on you when you’re exiting the business.

Depending on your business, solving operational gaps can be a lengthy process. If you’re looking to retire quickly and are able to accept a lower valuation, you can go to market with some operational gaps in place. But you need to be transparent about these gaps, as they’ll just get uncovered during buy-side due diligence.

An M&A advisor can work with you to help demonstrate business value, even with operational gaps in place. They will frame gaps as opportunities, quantify how much expected investment the buyer needs to solve the gaps, and the returns they can expect to see.

Improve Your Customer Contracts

A good way to maximize business value to potential buyers is with your customer contracts. Customer contracts can indicate reliable, recurring revenue. To put your best foot forward in a sale, you want to demonstrate that you have a variety of contracts and there’s minimal risk of them canceling or not renewing anytime soon.

In particular, buyers are likely to be cautious about:

• Businesses with high customer concentration: If your business’s value is derived from only a few high-value contracts, that can cause concern for a buyer. If one contract represents 25% of your quarterly sales, losing that contract would significantly impact the value of your business.
• Businesses where clients are likely to leave if the owner leaves: If you’re the one handling client management, there’s an increased risk of customers leaving when you leave. You can mitigate this risk by setting up a proper transition plan.
• Businesses with contracts expiring soon after the exit: This casts doubt in a buyer’s mind on whether or not these contracts will renew. If you can, renew or extend these contracts before the sale. If not, a buyer may offer an earnout: where you receive less upfront at the sale but get an earnout down the line if your customers’ contracts renew.

Sometimes, you can’t realistically lower customer concentration or renew contracts before your ideal exit date. If that’s your case, there are still some things you can do to demonstrate value to a buyer:

• Clearly document the history and stability of the contracts by showing consistent renewal rates. By creating a comprehensive account management process (as part of the standard operating procedures mentioned earlier), you can show that your business is set up to deliver quality service to your customers even after your exit.
• Demonstrate untapped opportunities within existing customers by offering add-on services that haven’t yet been pursued.
• Structure the deal so it involves earnouts if customers renew as expected.

These are things best discussed with an M&A advisor, as they’ll know which strategies are most impactful when it comes to achieving the exit you want.

Achieving Your Ideal Exit with an M&A Advisor

Although you know your business inside and out, you’re likely less versed in mergers and acquisitions. This can put you at a disadvantage as you deal with buyers who are skilled and experienced in valuations, due diligence, negotiations, and structuring deals in a way that makes the deal favor them and their investors.

You can protect your interests and retirement plans by partnering with a sell-side advisor. These are M&A advisors and investment banks that help business owners sell their businesses.

They help businesses navigate the M&A process by:

1. Valuing your business accurately

An advisor can get you an accurate valuation range, which you can’t necessarily do on your own. They do this by using the most fitting valuation methods for your company while factoring in market comparables and industry standards.

When you work with one of our recommended advisors, you’re working with someone who has the relevant deal experience needed to value your business accurately.

2. Increasing buyer coverage

The more qualified buyers you have interested in your business, the greater your chances of achieving the ideal exit in terms of sale price, exit timeline, and stewardship. But owners often have access to a limited network and even have a narrow understanding of who their potential buyers can be.

An M&A advisor will have access to an extensive network of buyers who have shown interest in buying companies like yours before.

Your advisor will also manage buyer distribution, which means sharing relevant information about your business to several buyers at once and disqualifying buyers who aren’t a good fit. This can create a competitive bidding environment where multiple buyers are sending you Indications of Interest (IOI) or Letters of Intent (LOI).

To give you an idea of how many interested buyers are needed to achieve an ideal exit and the importance of having an advisor who can manage buyer distribution, let’s look at Bob Falahee’s story. After working with our recommended M&A advisor, SunPro owner Bob Falahee ended up with 290 interested buyers. From that 290, he received 60 IOIs, which they used to arrive at a list of 12 potential buyers. From those 12, they were able to find one that gave them the exit deal they wanted.

3. Negotiating with interested buyers

M&A advisors help negotiate with buyers throughout the process. They’ll understand what you hope to achieve with your exit and will work to make that a reality. Based on their industry experience, they’ll have a better understanding of when to push back in negotiations, when to compromise, and when to walk away.

They can also help advise you on which of your exit goals may be unlikely given the state of your business or the market. With their expert, experience-backed insights, you can more confidently decide whether or not to take a deal.

But finding the right M&A advisor to handle your exit can be difficult. You want to (a) create a competitive process where you’re reviewing a large number of potential advisors and (b) filter available options based on specific criteria related to your business and your exit goals.

That’s what we do at Axial. First, we learn about your business and your goals for retirement. Then we look through our network of over 3,500 advisors. We evaluate your options based on factors such as business size, industry, and geography.

We narrow down your options to a shortlist of 3–5 M&A advisors who could be a great fit for you. Our Exit Consultant works with you to evaluate and interview those advisors, so you can confidently choose the right one.

You can start the process today by scheduling a free exit consultation.

How Current Tariffs Can Affect Your Exit (and How to Prevent Derailed Deals and Lower Valuations)

At the time of writing, various tariffs have been implemented across specific goods and in countries throughout the world. While the specific tariff fates are still in flux, the effects are already being felt throughout the M&A space.

As business owners are looking to retire and sell their business, there’s an increased risk that their business value will be negatively affected by either the tariffs or economic uncertainty.

Tariff Impact on Business Valuations

According to a recent analysis by Bain & Company, tariffs are reshaping investment priorities across industries. Roughly 40% of surveyed firms anticipate double-digit increases in product input costs due to tariffs. That could translate to buyers valuing your business lower, as now it’ll cost more to run your company.

Jim Cohen, Managing Director at Madison Street Capital, said that now, when he’s working with clients who are preparing to go to market, he’s advising his clients on what buyers will be closely analyzing in light of the new tariffs.

• How tariffs have impacted the company’s value: Buyers are going to want to know the direct effect of tariffs on profit margins and overall financial performance. This means looking closely at the costs associated with tariffs.
• Reviewing the vendors the company uses: More than before, there is now a focus on vendor review and analyzing the company’s supply chain. Buyers are looking for added costs and potential supply chain disruptions.
• How market volatility will affect growth: Even if your business is not directly affected by tariffs — as in, if your goods are mostly sourced from low-tariff countries or rely on local goods — it can still be affected by a volatile market. Buyers are looking to see if your growth estimates still resonate with this uncertain market.

Companies are already being affected by this, especially business owners who had been working towards selling their business so they could retire. For example, in late December 2024, a metal fabrication company went under an LOI with a private equity buyer. Executing an LOI is a good indicator that a close may be imminent. Both buyer and seller are interested in closing a deal together. But roughly 20% of this company’s cost of goods sold came from a China-based factory under their direct control.

Despite strong performance and a proven ability to navigate the tariffs of the 2025 Trump administration, the buyer was hesitant. Specifically, their investors, institutional limited partners, didn’t want to take on the uncertainty. The deal was paused with both parties agreeing to revisit the situation in the second half of 2025.

But there’s another example to consider where, despite significant tariff exposure, a deal went through with no issue. This was a consumer products business that sources 100% of its goods from Asia, completely exposing the business to potential tariff swings. But the private equity buyer didn’t hesitate, and they moved forward with the deal.

Their reasoning? Everyone in this space sources from Asia, so any tariff impact would be passed across the board and throughout the industry. In other words, the risk imposed by the tariffs is hitting the entire industry, not just this one company. So the value of the company continues to exist, even with new tariffs.

How to Mitigate Decreased Valuations and Stalled Deals Due to Tariffs

If you’re looking to retire in the near future and want to maximize your exit outcomes, then you need to factor in how tariffs (and the volatile market they’re creating) can impact the value of your business in buyers’ eyes.

For some businesses, such as companies that rely heavily on manufacturing and international trade, the impact will be significant. For others, tariffs may not change much.

But it’s something you want to be able to discuss as you navigate the M&A process.

This can involve:

• Outlining your supplier diversification strategy: If you’re working on diversifying your suppliers, make sure your plan is documented and can be shared with buyers. Even if the plan is in progress, it’s good to show buyers your business can diversify its suppliers.
• Quantify the impacts of tariffs on your EBITDA: This means identifying which imported materials/products are subject to tariffs and knowing the exact percentage of increased costs due to tariffs. With this uncertain market, you can also contextualize your value by showing historical EBITDA (pre-tariff performance), current EBITDA, adjusted EBITDA (what your EBITDA would be without the new tariffs), and projected EBITDA that shows value based on several different scenarios.
• Demonstrate how you can use pricing to protect your margins: If tariffs are increasing your costs, then present a plan on how you can use pricing power to offset those costs.
• Exploring alternative exit structures: You can consider different exit structures, such as seller financing or writing earnouts into the agreement. Both of these work to help keep the deal on track and compensate the buyer in the face of uncertainty.

These are just some general, high-level ideas on how to mitigate decreased valuations and stalled deals due to tariffs. Your specific strategy will depend on your business and your exit goals (including timeline, stewardship, and price).

When interviewing M&A advisors, you can ask them how they plan to help safeguard your exit in light of tariffs and uncertain market conditions.

Additional Resources for Business Owners Looking to Retire

At Axial, we have a dedicated resource center for business owners looking to retire. There, you’ll find all types of guides to help navigate the roadmap to retirement, no matter where you’re at on that journey.

• The 1,000 Day Exit Plan
• Free Business Valuation Calculator
• How to Prepare a Business for Sale
• How to Find an M&A Advisor
• Business Transition Planning: 3 Phases for a Successful Exit
• Small Business Exit Strategy

FAQs

What Age Do Business Owners Retire?

The most recent data shows that small business owners retire around age 72.

But there are several reasons that go into that number, including:

• Financial preparedness: Have you accumulated enough retirement savings to maintain your desired lifestyle? Consider working with a financial advisor to determine if your assets, investments, and potential business sale proceeds will sustain you through retirement.
• Personal readiness: Think about how you’ll spend your days without the day-to-day responsibilities of running your business. Many business owners struggle with the transition when they haven’t developed interests, hobbies, or purposes beyond their company.
• Family considerations: Discuss your retirement plans with your spouse and family members. Their support and input are crucial, as your decision affects them too. These conversations can help align expectations about lifestyle changes, relocation possibilities, or potential roles for family in the business.
• Business succession: Determine what will happen to your business. Will you transfer it to the next generation, sell to employees or a third party, or perhaps wind it down? A solid succession plan ensures your legacy continues and your team is taken care of.
• Industry timing: Consider the market conditions and whether it’s advantageous to sell or transition your business at this particular time.

When these elements align, you’ll know you’re approaching the right retirement age for your unique situation — regardless of what the calendar says.

For a more detailed breakdown of what’s needed to exit your business and begin retirement, you can view our Selling a Business Checklist.

How Do You Retire When You Have Your Own Business?

Retiring as a business owner isn’t something you just decide to do one day. Generally speaking, you’ve been working towards your retirement, whether you know it or not. It’s best if you can create a retirement roadmap as you run your business, so you can align your current goals with your retirement plans.

At Axial, we have several resources for business owners looking to retire, including:

• A guide on when to sell your business
• A guide to devising your exit plan

We wrote these based on our experience working with small business owners who are trying to decide when to retire and how to achieve their ideal exit plan in terms of sale price, stewardship, and timeline.

Here is a high-level overview of how you can plan to retire:

1. Establish your retirement vision: Determine what you want from retirement and what will happen to your business. Do you want to maintain some involvement, receive ongoing income, or make a clean break? Your vision will shape all subsequent decisions.
2. Develop a succession plan: Decide who will take over the day-to-day operations. Options include:
   • Transferring to family members in the next generation
   • Selling to key employees or partners
   • Finding an external buyer
   • Gradually stepping back while maintaining ownership
3. Value your business: Work with a professional business appraiser to determine what your company is worth. This figure is crucial for retirement planning and potential sale negotiations. If you’re at the early stages of exiting or just want a rough idea of your business’s worth, you can use our free business valuation calculator to get an estimate of your company’s worth.
4. Build retirement savings outside your business: Many business owners make the mistake of viewing their business as their only retirement asset. Diversify by contributing to retirement accounts like IRAs, SEP IRAs, and Solo 401(k)s to build income streams independent of your business.
5. Consider the tax implications: Different exit strategies have varying tax consequences. Consult with tax professionals to structure your retirement in the most tax-efficient manner.
6. Create a transition timeline: Most successful business owner retirements happen gradually. Consider a 3-5 year transition period where you progressively reduce your involvement while training your successors.
7. Update your legal documents: Review and revise operating agreements, buy-sell agreements, wills, trusts, and powers of attorney to reflect your retirement plans.
8. Prepare emotionally: For many business owners, the emotional aspect of stepping away from a business they’ve built can be the most challenging part. Consider working with a coach or counselor who specializes in business transitions.
9. Build your retirement identity: Start developing interests, community involvement, or even a small post-retirement venture to ensure fulfillment when you’re no longer defining yourself through your primary business.
10. Communicate clearly with stakeholders: Keep employees, clients, vendors, and family informed about your plans to ensure a smooth transition that preserves the business’s value and relationships.

The most successful business owner retirements typically begin planning 5–10 years before the actual transition, giving ample time to address all these elements thoroughly.