By Beth Armknecht Miller

Over the next five to ten years an estimated 10 million small businesses will be sold or closed as more baby boomers get closer to retirement. Many small business owners have much of their net worth tied up in these business and may see the sale of their business as their retirement plan. However, what they may not realize is that, even as a small business, not having a solid succession plan  in place can negatively impact this retirement.

Business purchasers are looking for an investment and if your business is dependent on you, the value of your company will be significantly reduced.

Not only will you get less money for your business, but you won’t be able to walk away. Purchasers will require you to have an “earn out”. This means you will be working for several years after the sale of your business to capture the full value of the transaction.

As a leadership development consultant to small businesses I often assist with succession planning.  Here are some of the most common mistakes.

Starting the planning process too late. If you haven’t assessed your team and identified your successor (either internally or externally) at least three years before you want to exit, you are at risk of not meeting your personal retirement timeline.

Choosing your successor in the image of yourself.  Too often business owners consider potential successors based on their own profile without evaluating the current and future needs of the business. Be honest with yourself about what skills are needed for the business to grow, even if they differ from your own and plan accordingly.

Giving up your title but not your control. The business owner brings in a successor and a year later the successor leaves in frustration.  Why? Because the owner keeps meddling in and not handing the reins over. Be willing to let go and mean it.

No future plans.  Start planning and implementing the next phase of your life. One business owner wanted to travel and play more golf. By the time he sold the business he was down to working about 20 percent of the time. It’s much easier to fill in 20 percent versus 100 percent of your time.

Succession planning done correctly, will make you dispensable to the organization. The result is a company that can be sustainable into the future and thrive without your participation. When you have accomplished this you can maximize the value of your business and not have to work for the purchaser. You can truly retire.

Beth Armknecht Miller is CEO of Executive Velocity, a talent and leadership development advisory firm. Beth is also a Vistage Chair. She is a graduate of Babson College and Harvard Business School’s OPM program. Beth is certified in Myers Briggs, Hogan, and Business DNA and is a Certified Managerial Coach. Her expertise has made her a sought-after speaker, and she has been featured in numerous industry blogs and publications. Beth’s latest book on executive leadership, “Are You Talent Obsessed? Unlocking the secrets to a workplace team of raving high performers” was released in 2014. Read Beth’s blog at Follow her at @SrExecAdvisor.