Retirement isn’t just about stepping away from the business—it’s about setting yourself, your family, and your team up for long-term success. For Canadian business owners, the years leading up to retirement are a critical window to plan, prepare, and act strategically. Here’s your year-by-year roadmap to a successful business exit.
Year 5: Clarify Your Retirement Vision
Before looking at numbers or tax strategies, start with clarity.
- What does retirement look like to you? Full exit or part-time advisory role?
- What legacy do you want to leave behind? For your business, your family, and your community?
- What will you need to maintain your lifestyle? Begin rough planning around your desired retirement income and timing.
This is also the time to begin informal conversations with your spouse, co-owners, and key stakeholders.
Year 4: Get a Business Valuation & Clean Up Financials
Your business may be your largest asset. But do you know what it’s really worth?
- Seek a professional valuation to identify strengths and gaps.
- Clean up your books by separating personal expenses, resolving outstanding liabilities, and simplifying financial statements.
- Start tracking key performance indicators (KPIs) consistently—buyers want predictability.
If needed, bring in a fractional CFO or accountant experienced in business exits.
Year 3: Optimize Your Structure & Tax Strategy
Now’s the time to position the business—and your ownership—for tax efficiency.
- Maximize the Lifetime Capital Gains Exemption (LCGE) Ensure your shares qualify under the qualified small business corporation (QSBC) rules. This could shield up to $1.25 million (2025 indexed amount) in capital gains from tax.
- Review your share structure Consider whether a freeze or reorganization can help split future growth among family members or a holding company.
- Establish a holding company Use it to defer taxes, protect capital, and plan future income streams post-sale.
Consult with a tax advisor and corporate lawyer—these moves are most effective when made early.
Year 2: Identify and Develop a Successor
Whether you’re selling externally or passing the business to family or staff, the transition hinges on leadership continuity.
- Internal succession? Begin mentoring your heir apparent. Define their development plan.
- External sale? Start grooming your management team to be less dependent on you.
- Family transition? Clarify roles, expectations, and ownership decisions to avoid conflict.
A strong, autonomous team increases business value—and buyer confidence.
Year 1: Execute the Transition
With the groundwork laid out, you’re ready to begin your exit.
- Finalize the sale structure and legal documentation
- Communicate the plan internally and externally
- Create a transition schedule—whether that’s 6 months of overlap or an immediate handoff
- Secure your own financial plan, including retirement income, estate intentions, and post-sale tax strategy
This is also a time to reflect, celebrate, and thank those who supported your journey.
Final Thoughts
Retiring from your business is one of the biggest transitions of your life. But with five years of intentional planning, it can be a launchpad—not just an exit. You’ve built something great—now take the steps to protect it, pass it on, and enjoy what’s next.
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