Separate what the business is worth from what you need
An owner’s desired retirement income does not determine company value. Start with the business, its economics and the interest being valued. Separately, assess personal objectives with the appropriate financial and tax advisers. Keeping these questions visible helps reveal a gap early, while there is time to examine options.
Tell us whether you are exploring a full sale, a gradual exit, a family succession or an MBO. The valuation purpose and date should reflect the stage of the decision, rather than assume a single number fits every route.
Make the founder’s work visible
List the roles the owner performs: customer relationships, sales, delivery, pricing, hiring and oversight. Identify which tasks management already handles and which will need replacement resources. Lower owner pay after an exit does not necessarily mean the whole cost disappears. Transition commitments and continuing involvement should be explicit.
For an internal succession route, see the SME management buyout guide. Family transitions raise additional questions about ownership, employment and separate balances; our family business valuation page explains the starting brief.
Compare the routes using the same questions
| Exit discussion | Questions to make explicit |
|---|---|
| Trade sale | What is acquired, what continues without the owner and how is the price paid? |
| Management buyout | What can management fund, and what cash must remain in the business? |
| Family succession | Which ownership, employment and loan arrangements change? |
| Staged exit | What role, rights, payments and risks continue after the first step? |
This comparison describes preparation questions, not a recommendation for a particular exit structure. Implementation needs suitable legal, tax and other advice.
Understand the timing of the money
An equity value is not automatically cash available on day one. Debt and cash definitions, working capital, fees, tax and the sale terms can affect proceeds. Deferred or conditional amounts should be shown separately from completion cash. A seller retaining exposure to the business needs to understand that continuing risk.
A valuation can support the discussion; a transaction cash model examines the proposed payments and assumptions. Personal retirement planning is a separate engagement.
Prepare before a deadline drives the conversation
Organise current trading figures, ownership records, a responsibilities map and a list of unresolved financial questions. Explain when you want to step back and what continuing role is realistic. The first conversation can identify the appropriate valuation brief and information needs before a scope and fee are agreed.
Your starting checklist
- Preferred timing and possible exit routes.
- Accounts, current trading and founder responsibilities.
- Proposed payment terms and separate personal planning questions.
Frequently asked questions
Does this service include personal retirement investment advice?
No. This page concerns business valuation and exit preparation. Personal financial planning, investment and tax advice need their own suitable advisers and scope.
Can I request a valuation before deciding to sell?
Yes. Planning can be a legitimate purpose, with the relevant date, assumptions and intended use agreed before work begins.
Will a buyer pay the retirement amount I need?
Not necessarily. Buyer offers depend on the business, evidence, terms and their own circumstances. Personal funding needs and business value should be analysed separately.
Consult EFC preparation guidance. Examples are hypothetical and do not represent client results or a company-specific valuation. Any professional work requires an agreed scope and intended use.