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How To Retire From Your Small Business Without Losing Everything You've Built

by John Cobb

Reading Time: 11 minutes 17 seconds

Are you the owner of a business who is looking to retire soon? If you can honestly answer yes to this question, this article might be the most important thing you will ever read.


Make sure you read to the end right now. It should only take about 10 minutes. If you do not have time to give this article your full, undivided attention, I would recommend bookmarking this link so you can read it later.

As a business owner, you know that the goal of every entrepreneur is to have a successful exit. Most of the money you make is not as a business operator. Rather, the largest capital events happen when you sell. Unfortunately, selling is an extremely difficult process for most business owners. This is for two reasons.

It's tricky to get a realistic valuation.

The first reason is that it is tricky to get a proper valuation of your business.


There are three types of people that most entrepreneurs turn to when it comes time to sell. They are: business brokers, accountants, and consultants. I will explain why it is a mistake to engage and trust these people with what could be the most important financial decision of your life.

Beware of Business Brokers

Business brokers provide an outstanding service for two types of business owners. The first type is the business owner who does not mind paying outrageous fees. This type of owner does not mind if someone else cashes in big time on the blood, sweat, and tears that have gone into building their business. The second type who would benefit from working with a broker is the owner who has had responsibility thrust upon them. They are not entrepreneurs by nature. They have gotten ownership through inheritance. They have found another purpose for their lives. They do not care to retain ownership of the business. It is in the best interest of everyone that they work with the business broker so that the business does not suffer and jobs can be saved.


Let me explain the typical fee structure (that makes me cringe as an entrepreneur who detests wasting money). Traditionally, brokers charge between 8% to 12% of the selling price. There is also an upfront fee of $8,000 to $20,000. These fees vary based on the type of the business. It is also important to note that they get this fee no matter what price the business sells for.


Now, let’s say your business sells for $1.6 million. You could potentially pay out $212,000.


That is the best case scenario. However, a more likely outcome would be a payment of $15,500 that goes directly into the broker’s pocket. This fee would buy you a year's supply of glib and doublespeak until you eventually give up hope that a transaction would occur.


With this fee structure, there is no incentive for the broker to do their job. On the contrary, they are incentivized to keep the valuation artificially high which wards off potential buyers who would have otherwise sensible offers. If they somehow manage to do their job, they would get a huge payout on top of the massive upfront fee.


As you can clearly see, the broker makes a lot of money whatever the outcome of your business exit. They do not have to do what you paid them to do to make a bushel of money.


Let me stress that business brokers are not malicious. They are great friends for trust fund babies and jaded entrepreneurs. They are just not the right kind of associate that you want if you hope to keep as much money as possible for your retirement.

Accountants Aren't an Option

Some business owners choose to engage their accountant when it comes time to exit. This seems like a good idea because accountants have naturally good networks. They know all sorts of people and can be a solid source of information. They may have a good understanding of the tax obligations relating to a sale of a business. Some accountants may even offer to look for a buyer without asking for an upfront fee.


However, accountants do not have the same entrepreneurial mindset as the typical business owner. Accountants are hired mostly to keep all levels of government at bay when it comes time to pay taxes. Sometimes, they help with permits and other requirements. They are programmed to cut costs, avoid risk, and limit potential exposure.


Accountants are not the best people to ask to take over the reins of a business. Their natural instinct is to cut as many expenditures as possible. It is for this reason that they cannot give you an accurate valuation of your business. They create a climate that does not encourage innovation. Nearly every book on the subject of management (that was written by someone with experience running a business, not a fusty academic in a stuffy office) says that you need to keep your creative types insulated from the accounting department. New ideas with potential to grow the business are ruthlessly slaughtered by their spreadsheets and projections.


As a result of their natural inclinations, it is a risky proposition to have an accountant be the person in charge of helping you sell your business. They lack the creativity needed to structure the best possible exit. They are a valuable but they are not the best possible choice for leading what will be the most important financial event of your life.

Avoid Consultants At Any Cost

The absolute worst person you could hire to help you exit your business is a consultant. A consultant should be employed to create value for your organization. A transfer of ownership is not an activity that creates value because it causes stress for the organization, its customers, employees, and vendors. There is too much uncertainty.


I have heard all sorts of horror stories about consultants doing unspeakable damage through misguided “restructuring” to "improve" the selling price. For the sake of brevity, I will not say anymore on the subject of consultants. This is an article about how to retire from your business without losing everything you’ve built. It is not about all the possible ways you can destroy your business.

Experienced Entrepreneurs Know Best

It takes the experience of entrepreneurs who have been successful to know what your business is actually worth. While each sector is different, the fundamental principles do not change and an experienced entrepreneur will know how to best value your business.


There are a lot of things that come into play when valuing a business. An experienced entrepreneur can easily place themselves in a potential buyer's shoes. They can provide you with an honest, accurate account of the key advantages and disadvantages of your business. They know what your business is worth because they have the necessary experience.


In some situations, business valuations are calculated based upon a multiple of EBITDA (Earnings before interest, taxes, depreciation and amortization). Other times they are calculated based on SDE (Seller Discretionary Earnings).

How Realistic Valuations Are Calculated

Let me give you a concrete example how this comes into play for a business owner who is looking to exit. I am going to give you two examples from the same industry.

Imagine you own a restaurant. You are the chef, the bookkeeper, and you oversee all the marketing activities. You have three employees but their main focus is on waiting tables and busing. Your take-home pay is $100,000 per year. In this scenario, SDE would apply. You may see a multiple between x2 and x4 so your business would be worth between $200,000 and $400,000.

Now, imagine you own a restaurant chain. You have 19 locations and the business basically runs itself. People enjoy eating at your restaurants. At pre-pandemic levels, the EBITDA multiple was at about x7. If your restaurant chain had an EBITDA of $4 million, you might be able to sell it for $28 million.

You can see the risk of hiring a fee-taker like a broker or a consultant because they may base their valuation on an entirely unrealistic number. Quite often, business owners hire fee-takers and then think they can ride off into the sunset before a deal is in place. They lose focus on their business. The business value plummets. They're forced to shut down the business. All because of putting their faith in someone who they have paid an upfront fee. Countless businesses have been destroyed this way.


The fee-takers don't care what happens because they have already been paid!


Now, you understand why you need to work with real entrepreneurs.

Key Takeaways:

  • The price your business sells for is the price that someone else is willing to pay.
  • Avoid dealing with fee-takers like business brokers and consultants. Fee-takers do not care what happens to your business because they have already been paid upfront.
  • When selling your business, you need to work with an experienced entreprenuer who does not charge an upfront fee. They will give you the best possible valuation.

It's tricky to structure a deal where both parties win big.

The second reason that it is a challenge to sell your business is that it is very difficult to find somebody with the cash or creativity to structure a mutually beneficial deal where both parties win big. Every business owner has some contacts that might be able to help them exit their business but their network might not be enough to ensure that they get the best deal possible.

On top of it, the news cycle continually repeats about people who are publicly listing their companies or selling them for millions or even billions of dollars. Then, the news says that these massive funds have too much cash and they're chomping at the bit for new investments.

How can an entrepreneur capitalize off of all this cash that is just floating out there? You can't show up at a private equity firm's office and tell them that you want to sell them your business. They wouldn't let you in past the secretary. Or, if you got through, they would probably tell you that your business is too small and to go away. For those guys, big business is beautiful and they don't have time to deal with businesses that are under $75 million. (I know this because I have tried. I had a distressed portfolio worth about $15 million and I reached out to a few investment firms and they didn't even want to consider it because it was too small.)

I am going to tell you about a proven way that dozens of business owners across the United States have used to successfully exit and retire comfortably without losing everything they worked hard to build. This business exit strategy does not involve working with predatory fee-takers like brokers who have been known to swarm like vultures over a business when the owner is getting ready to enjoy their golden years. In some cases, this proven method gets the attention of large investment firms and publicly traded companies that have big money.

Key Takeaways:

  • Your network might not be enough to help you get the best possible deal when it comes time to exit your business.
  • Those big private equity funds are sitting on a lot of cash right now. They are hungry for new assets.
  • You cannot just walk into the office of one of those funds and tell them you want to sell your business. They would turn you away like they did to me with my "tiny" $15 million dollar distressed portfolio.

This is the proven way to have a successful exit and win big.

Before I tell you about this method, I would like to make one thing perfectly clear. This method is entirely risk-free because I am not a predatory fee-taker. There is no charge to learn about this method. There is no obligation for you to take advantage of this method if you decide that it's not the right way for you to exit your business. You do not have to use any information I share with you.


Only you know what is best for you.

My primary motivation is to help business owners retire comfortably. My secondary motivation is to ensure that people keep their jobs. This economy is tricky enough to deal with as it is. We don't need to be destabilizing people.


Now, it is time for me to explain the method on how you can retire from your business without losing everything.


It is shockingly simple. You can start on the path towards a stress-free exit from your business in about 36 seconds.

At the bottom of this page, there is a contact form. You need to fill out the contact form with accurate information.


That's it.


My team will contact you and help you plan your exit.

You need to put in a phone number that you will actually answer and a email address that you actually check. Do not put in a fake phone number or a fake email address because that is very selfish. If you do this, you are stealing time from other business owners who could actually benefit from selling their business and retiring comfortably. My time is extremely limited so I do not have time to call fake phone numbers and send emails to fake accounts.

After you fill out the contact form, I will reach out to you to set up a time to talk about your business. Everything we talk about is strictly confidential. I will ask you 12 questions including what your ideal retirement scenario is. After we talk, I will get to work developing your exit strategy. I will find the best deal possible for you (I have access to those big money guys). The process can be as quick as 37 days to wrap everything up.


Make sure you fill out the contact form right now because my availability fills up. I have a strict appointment system that I follow because I am frequently pressed for time.

Key Takeaways:

  • You should work with my team to make sure that you get the best possible deal.
  • We do not charge upfront fees.
  • Our service is confidential and entirely risk-free.
  • There is no obligation to use our service.
  • We will ask you 12 questions about your business.
  • Your exit can be completed as fast as 37 days.
  • Fill out the contact form below this section right now to get started. Make sure you put accurate contact information.

Ready to Enjoy Your Golden Years?

If You Prefer to Talk on the Phone...

If you prefer to speak with somebody on the telephone, you may call my office at (602) 926-0191.  Someone will take your call and will collect information from you regarding your business. They are knowledgeable but do not have the answers for every question. My office is located in Arizona so please keep that in mind.


Sometimes, everyone is on a call so we cannot answer right away. If we do not answer, please leave a message with your name and phone number. We will get back to you as soon as possible.

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