By Ed Avis

Are you past the normal retirement age but still self-employed? If so, you have lots of company. Nearly 17 percent of people over age 65 who were still working in 2016 were self-employed, according to the Bureau of Labor Statistics. Common self-employed positions for those people include consulting, freelance writing and running a small retail business.

So, here’s the question: When you finally decide to give up work, will you be able to sell the business you are now running? Many factors impact the answer, experts say, but the bottom line is this: Even when a business depends on one key person, it’s possible it has value to somebody else and can be sold.

“Those businesses can still sell… (but) generally not with payments in full at closing,” says William Barrett, CEO of law firm Mandelbaum Salsburg P.C. in Roseland, N.J. “Often there is an earn-out where the amount paid is based on future collections.”

Obviously, if your business generates millions of dollars per year and you have a decent management structure in place, you’ll likely find a buyer. You still need to plan the transition many years ahead and ensure, as much as possible, that the value of the business will survive your departure. But small businesses that generate good cash flow generally attract buyers.

Not making millions? That’s when things get a bit trickier. Let’s say you own a small retail business. It makes enough money for you to pay yourself and your employees, and maybe a save a little extra, but those numbers are not in the seven-figure category.

First, consider inviting a younger family member or trusted employee to become a partner. If your business is large enough to have managers, those people are obvious candidates.

“Sometimes the buyer is already working in the company; they just need an opportunity,” notes Ben Feldmeyer, owner of Feldmeyer Financial Group in Dayton, Ohio. “I encourage business owners to look for family, key employees, new hires and outside buyers.”

The key with this kind of sale is that it should begin years before you want to retire. Because your business is not generating a ton of extra cash, it’s not likely your chosen family member or employee is going to come up with a big chunk of money and suddenly buy you out. But if you agree upon an amount spread over 5 to 10 years, that may be feasible.

“We have had a couple of clients with smaller retail businesses who sold, typically with a 7- to 10-year note,” says Nick Strain, a wealth advisor at Halbert Hargrove, an investment management firm with offices in five states. “I think the buyers paid 20 percent up front and made payments for 7 to 10 years. In those cases, the seller usually stays on in some consulting capacity to help with the transition.”

Another option is to consider selling or merging your business with a competitor or similar, non-competing business. Sometimes this can work even if your business is not doing very well, because the competitor values something — your customer list, your inventory, your intellectual property — that an outside buyer may not appreciate.

“We had a client in a niche business who was approached by a larger business within the same industry,” Strain says. “He went through the entire selling process and then decided not to sell, because he had built up that business from the ground and didn’t know what he would do after the sale. But I think there will be an opportunity to go back to that buyer and restart discussions in the future.”

A consultant or freelance designer poses different challenges. These businesses are generally entirely based on the owner’s skills, which makes for a difficult transition. But even in those cases, it’s possible someone will be interested.

“I’ve had a couple of clients who were business consultants who sold their businesses,” Strain says. “The key is you have to prove that if the owner leaves the company, the clients won’t leave, too.”

In one case Strain handled, a consultant folded his business into that of a larger consultancy. He stayed on for a year to make sure his existing clients made the move with him, then retired with a decent payout from the buyer.

A similar situation might be arranged for any single-person business with a loyal client base. An independent sales rep with solid accounts could join forces with another sales rep in the field, for example, and eventually turn over those accounts. Or a successful freelance designer might join an established firm and bring her clients along, then retire six months later.

If your business is making money, it’s possible a buyer will see value in it.

Says Strain: “Even if you’re small, someone else might think your business is key to their growth.”

Download PDF

For more information or questions, please contact Halbert Hargrove at