5 Levels of Retirement Decision Making. (Money is just the beginning.)

After working with business owners for 25+ years, the following statements are true. Many owners…

  • Considering retirement have enough money.
  • Say they WANT to retire.
  • Say they’re READY to retire. 

Yet years pass as they struggle with the decision. Why?

First, it’s critical to add some insight surrounding two words- selling and retiring. 

Selling vs. Retiring

Owners often think these two words are synonymous with one another. However, they are entirely separate. A common scenario is when an owner sells the business, but then continues to work.

Many owners are not ready to retire. They’re just tired of owning.

When the right circumstances are present, they can sell their business (all or in-part) and continue to work in the business. Additionally, they often even have a choice of working full or part-time, for months or years, until they’re ready to fully retire. 

As you might imagine, there are various combinations of these scenarios. Essentially, this allows owners to take some chips off the table but still contribute, focusing on the areas of business they like, such as being a sales manager, estimator or PM.

Disaster restoration is a hectic industry. As a result, some view this as a nice half-step between ‘owning’ and full-on retirement. 

Now let’s turn our focus to the 5 levels of retirement decision making. Understanding these elements is fundamental to gaining clarity of a complicated decision. 

1. Financial

Let’s start with the obvious, are you financially able to retire? May sound like a simple question; it’s surprising how many owners don’t know for sure. 

Many owners have existing relationships with professionals (i.e., wealth advisors, estate planners, etc.) who can assist with this decision. This is a fantastic place to start for assistance in answering the question.

It’s not at what age I want to retire, it’s at what income. ~ George Foreman

If you’re not financially able, almost without exception, the remaining variables are in a distant second place.

2. Ready or Tired

Second, if financially able to retire, are you ready? Many owners cloud being tired (ultimately wanting to change their work-life balance), with the only solution they can think of, selling their business. 

These two variables are easy to combine. However, both challenges should be addressed separately.

Simply Tired-

If you’re simply tired, but not ready to retire, that’s fairly common. A successful solution often involves hiring a consultant who assists with systems and procedures, accountability, trust and delegation with your team. They generally apply industry ‘best practices’ to you and your specific business. With some intentional steps ‘tired’ can be solved. A satisfactory work-life balance is essential for a rewarding career.

Feeling Ready-

If you are feeling ready to retire, or think you’ll be ready within the next few years, then answers are essential. A few solid answers relating to business value, best buyers, transition timelines, wealth preservation, tax consequences and more, will not only provide confidence but ensure the best decisions are made for you, your family, and your future. 

Where is Your Needle? 

I always like to ask potential sellers, “How much gas do you have left in the tank?” The response is often, “Enough… but ready to call it quits.” Occasionally I hear, “JT… I’m runnin’ on fumes… you gotta get me outta here.” The honesty is appreciated. 

This honesty trumps when an owner says some version of, ‘I could work for years yet.’ Then, fast forward a few months, when an offer comes along (even a weak one), the seller acts like a dog after a bone! 

It’s quite common… many owners are actually ready 1-2 years before they reach out to begin the process of selling.

The danger? Some owners get ‘short-timers syndrome.’ They get one foot out the door and their business begins to suffer. 

Where’s your needle on the fuel gauge? An honest conversation with yourself (and possibly your spouse) will determine where you stand.

3. Market Timing

I’m regularly asked, “When is the best time to sell?” Of course, it’s impossible to answer in your specific situation. However, here are a few guidelines to consider.

Like Stocks- 

Selling a business is a little like the stock market; when it is rising, it’s more attractive with less perceived risk. When declining, the perception of risk increases, thus decreasing value.

Industry Strength- 

During the 2008 recession, the disaster restoration industry was minimally affected. Even in the 2020 pandemic, with few exceptions, the industry remains strong. 

Industry Consolidation- 

This has been a hot topic the past few years. There have been many high-profile consolidations with dozens more in the shadows. In a tumultuous market, the industry itself has been viewed as a ‘safe place’ to invest. Thus, the heightened appeal by not only industry buyers, but PEG’s, capital groups, family investment firms, etc. As of now, there are no signs of the consolidation trend slowing. 

It’s essential to understand, selling to an industry buyer is not an ideal structure for every seller. There are elements of their preferred structure that can be deal breakers for some. However, it may be worthy of consideration when the time is right. 


Part of the market consideration should always be the strength of both buyers and the lending environment in which they operate. Over the last decade, there’s been no shortage of experienced GM’s, lead estimators or PM’s wanting to own their own business. Couple this with low-interest rates and a favorable lending environment, it’s proving to be a solid combination.

4. Emotional

Years ago, I brokered the business of an 83-year-old owner who had started her company in 1951 at the age of 29. Her name, face, and personality were synonymous with her business, so it was with sensitivity we discussed retirement, hobbies, the joy of family, grandkids and more. She agreed wholeheartedly, reaffirming her desire to sell. 

Within months we found the ideal buyer and negotiated successfully. Two weeks before closing she called, one I will never forget. In tears, she was distraught with her decision to sell. She finally said with exasperation, “Without my business, who am I?”

After 50+ years as a business owner, she had no idea who she was supposed to be outside of her company. She absolutely couldn’t comprehend life beyond work.  After a successful sale two months later, she told me selling her business initially felt like death.

This scenario may seem extreme, but it perfectly illustrates a point. To a degree, every owner must face this question, “Without my business, who am I?” Many owners are not ready to sell until they have successfully reflected on (and answered) this question.

Why so difficult?

Business ownership has its privileges, financial and otherwise. For some, being the boss brings a gratification that’s difficult to give up. 

As an owner, you’re needed, people depend on you, and your opinion is paramount. I’m not referring to owners who go out of their way to gain attention- simply referring to the day-to-day management decisions (and social status) that often fall in the ‘ownership’ spotlight. When contemplating a sale, for some, it’s troubling when suddenly realizing they may not be viewed as ‘important’ without their company.

When the Phone Stops Ringing-

You’ll have your own unique experience. Here’s an example. A few years back, I assisted a Canadian client in successfully selling his business. The buyer had significant experience and the transition time was short. Just three weeks after closing, he and his wife took a 7-day vacation for the first time in 20+ years.

He called me upon his return, with trepidation in his voice. “My week was a bit surrealmy phone only rang twice in six days, and those calls were from my kids checking up on us! Apparently, nobody needed me. Nobody cared where I was or when I was going to return. It’s a little odd but think I can get used to it!”

How will you react when the phone ‘stops ringing’? 

5. Social

Being socially and emotionally connected to a network of friends and associates matters.

As it relates to retirement, this strong social component has been ignored. According to John Cacioppo, a professor of psychology at the University of Chicago and director of the university’s Center for Cognitive & Social Neuroscience…

“We think about financial protection in retirement, but we think very little about social resilience after retirement.”

Not being or feeling connected is social isolation. Researchers have determined this isolation can be as harmful as cigarettes and drinking, actually shortening lives! You’re probably thinking, “I have friends… this one doesn’t apply to me.” Well, here’s exactly why it might.

As an owner, let’s look at your most popular social connections; it’s called your ‘social portfolio’:

Q: In a typical day, who do you communicate with? 

A: Employees, vendors, suppliers, clients, sub-contractors, etc. 

The vast majority of connections are often work-related! For many, the simple thought of not working equates to the elimination of these connections. What follows? According to science, feelings of loneliness and social isolation. Seriously? Yes, apparently so. 

It’s no mystery why many say they want to retire but can’t bring themselves to do it. Worse yet, they don’t even know why? 

Two Key Questions

While working, most owners admit feeling ‘emotionally connected.’ Thus, the two not-so-silly key questions become: 

●     “Who are my social connections outside of work?”

●     “How important are they?”

Spending time now to successfully cultivate a ‘social portfolio’ away from the office will prove to be a valuable investment of time, likely making the decision to retire an easier one. 

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Many owners approach retirement with ease and grace, welcoming it with open arms. Others struggle as they venture on a quest to discover who they are and their ultimate purpose outside of work.

Once you have answered the basic financial questions surrounding the ability to retire, I challenge you to ask yourself a few more. These answers will not only assist in your decision-making, but quite possibly be a pleasant surprise.