Most owners have a version of the same thought tucked away somewhere. The business is the plan. Sell it when the time’s right, and everything else sorts itself out.
And honestly, that’s fair enough. You’ve spent years building something worth having, so of course it’s the thing you expect to lean on one day. Bit by bit, almost without meaning to, you end up using your business as your pension.
The only snag is that a sale isn’t really a plan; it’s a number. And it’s usually one that sits quietly at the back of your mind, rarely said out loud and hardly ever checked. When so much of your future is riding on that one figure, it’s worth giving it a proper look.
The number in your head
Ask an owner what the business might sell for one day, and you’ll usually get an answer pretty quickly. Not a proper valuation, but just a feel for it or a figure that sounds about right.
It’s worth asking where that figure came from, though.
More often than not, it’s a good year that stuck in the memory, something you heard a competitor sold for, or a number someone mentioned in passing at an event. None of that’s exactly wrong, it just hasn’t been tested. It’s a hope dressed up as a plan.
That one figure ends up doing a lot of work. It shapes when you think you’ll step back, what retirement looks like in your head and how comfortable you feel taking money out along the way because part of you assumes the sale will square it all up in the end.
That’s an awful lot to pin on a number nobody’s ever really checked.
What a buyer actually pays
This is usually where the cracks start to show. The figure in your head is what the business is worth to you. What matters is what someone will genuinely pay for it, on the day, in the real world.
The two don’t often match, and there’s a fair bit that gets lost in between.
For starters, the price often isn’t one lump sum on completion. Lots of deals pay some of it upfront and hold the rest back, linked to how the business does once you’ve stepped away. Then there are the professional fees and the tax on what you receive.
And then there’s the timing of it all. A buyer has to actually be there, happy to pay a price you’re happy with, at roughly the moment you were planning to leave. That’s a lot to line up at once.
Deals drag on, the right buyer doesn’t always appear on cue and every so often, an owner gets right to the point of selling and realises they’re just not ready to let go.
None of that means a sale won’t happen, or won’t go well. Plenty do, and brilliantly! It just means what you end up with can look quite different from what you’d imagined, and it’s much nicer to know that early on, rather than when everything’s already resting on it.
How you end up using your business as your pension
So if taking an honest look at that number is this helpful, why do so few of us do it?
It’s rarely down to neglect; it’s usually something much more human.
Sitting down to work out what the business might really fetch, or moving money out to build something separate alongside it, can feel a bit like you’re doubting your own business. Like you’re hedging against the very thing you’ve poured your heart into. So it drifts down the to-do list, year after year, and backing the business wins out again. Which is how, without anyone ever quite deciding to, the business quietly becomes the pension.
It usually happens like this:
You keep your own pay modest, because the business can do more with that money than you can, so the profits stay in the company. Then the pension either never gets set up, or gets a bit of money put into it early on and then forgotten about. If you do that for fifteen or twenty years, the business isn’t just your biggest asset, it’s very nearly your only one. That’s the point it becomes your pension.
A sale is an event, not a strategy
The good news is that the fix is simpler than it sounds. A sale happens once; real security gets built gradually, over years.
Rest everything on that single moment, and there’s very little room for it to go differently. Build something up alongside it, and the sale becomes a lovely bonus rather than a rescue. It sits on top of a plan that already stands up on its own.
In practice, that might mean drawing your income a little more deliberately as you go, or putting something into personal wealth alongside the business instead of leaving it all locked inside the company. Pension planning can play an important role here too, helping to build assets outside the business and reducing reliance on a future sale
None of this is about losing faith in your business. It’s just about making sure it doesn’t have to carry your whole future on its own. It’s the same idea we looked at from a different angle in our article on why business owners can be profitable but financially exposed.
Where this leaves you
So, none of this is us telling you not to sell, and it’s definitely not us saying your plan’s wrong. For a lot of owners, a sale will be the well-earned reward for years of hard graft, and rightly so.
The point is a gentler one. Sell, absolutely. Just try not to let that sale be the only plan you’ve got.
If that number’s been quietly carrying the weight all on its own, without ever really being looked at, it might be worth taking a step back to see the whole picture long before you have to decide anything. Not because anything’s gone wrong, just because a plan you’ve actually sat down and looked at tends to feel a lot calmer than a number you’ve only ever hoped for.
This article is intended for general information only and should not be considered personal financial advice. Whether any approach is suitable will depend on your individual circumstances.
Investments can fall as well as rise in value, and you may not get back the original amount invested.
