Articles and Education

Planning for Retirement: The Role of Selling Your Freight Forwarding Business

Baby Boomers operate an estimated 12 million small businesses across the United States.  

But many of these individuals (us) have reached retirement age and are making decisions about the future of their businesses.  

On average, around 350,000 Baby Boomer businesses change hands each year​.

And freight forwarding businesses are not immune to this trend. In 2021, there were approximately 101,180 businesses in the U.S. freight forwarding market, highlighting the significant opportunity for business owners and investors. 

Planning Your Exit Strategy

Business owners, those that own small to mid-sized businesses especially, put all of their time, energy and often all of their own money into growing their businesses.  

If you’re in your 50s or 60s now and own a freight forwarding company, you probably share many of these characteristics: 

      –  You’ve been in business for 20-35 years. 

      –  Money made from the business has been divided between reinvesting in it and funding yours and your family’s lifestyle. 

      –  If you have adult children, you’ve realized that they just aren’t interested in taking over what you see as the family business. 

And as you consider what “retirement” looks like for you; you realize that selling your business is the primary way you can have the life you want. Whether that means cashing out completely or negotiating an ongoing stream of income.  

Here are 3 things to consider while you’re putting your business sale or exit strategy together as a baby boomer: 

The Importance of Early Planning  

The larger your business, the longer it typically takes to sell. This is the one place your success works against you if you were hoping for a quick 90-day sale.  

Planning an exit strategy is something you should be thinking about years in advance. So if you’re reading this because you are starting to look ahead to retirement you’re in a good place. 

Because early planning gives you the chance to boost the value of your business, prepare your team for the transition, and ensure you have a roadmap for your retirement. Plus, understanding your exit strategy can also help you make better business decisions along the way.  

You might invest differently, focus on certain areas of growth, or even operate your business differently based on your exit goals. 

Different Exit Strategy Options 

When it comes to exiting your business, there isn’t a one-size-fits-all solution.  
Your best exit strategy depends on your personal goals, financial situation, and the state of your business. Selling outright to another company or an investor is a common choice, but it’s not the only one 
You could pass the business on to a family member, sell to a co-owner or employees, or even set up an Employee Stock Ownership Plan (ESOP). Albion Mergers and Acquisitions have worked with each one of these scenarios and all provide specific advantages and challenges.  
Some business owners opt for a gradual exit, slowly reducing their involvement over time. This is a common option if you have family or employees that will be taking over the company. And it’s also a common option if you want to ease into retirement as well.  
It’s important to explore all the options and consider what’s right for you, your family, and your business. 

The Role of Business Brokers in Facilitating Sales 

Experienced business brokers play a key role in the exit planning process. 
They can help you understand the current market, value your business accurately, and find potential buyers. And of course, connections in the industry allow business brokers to navigate the sales process, negotiate the best deal, and ensure a smooth transition.  
But they can also find you the right buyer. One that is willing to work within your retirement targets regarding timing, buy-out and ownership options as well.  
They can also provide valuable advice on timing your exit to take advantage of market conditions 
Remember, selling a business is probably something you’ll only do once, so having an experienced professional on your side can be invaluable. Especially when your retirement is at stake.  

Regular Income from the Sale vs. Selling Outright: Pros and Cons

You can negotiate ongoing income from the sale of your business in a few different ways. 
One is holding the note and collecting payments and interest income on that note. In effect, you become the “bank” that the buyer is using to finance the purchase of your company.  
Another is a revenue share model where you earn a base monthly income with some kind of performance impact that allows you to continue to benefit from the continued growth of the business you have built.
Selling Outright
Selling your business outright means you receive a lump sum payment at the time of the sale. This approach has several advantages: 

  • It provides a large amount of capital immediately, which can be invested or used as needed for retirement. 
  • It allows for a clean break from the business, so you can move on to other things, like retirement or a new venture. 
  • It eliminates future risk associated with the business’s performance. 

However, selling outright also has its drawbacks: 

  • You may have to pay substantial capital gains taxes on the sale. 
  • The buyer may demand a lower price for an outright sale compared to a structured deal. 
  • You lose any potential future profits from the business. 

Income Strategies 

Choosing to receive regular income from the sale, such as through owner financing or a buyout agreement, also has its pros and cons: 

  • It can provide a steady income stream during retirement, similar to a pension or annuity. 
  • It may result in a higher overall price for the business. 
  • It could potentially offer tax advantages by spreading out the income over several years. 


  • It ties you to the business’s performance post-sale. If the business struggles, your payments could be at risk. 
  • It could complicate your finances, as you’ll need to manage the ongoing payments and any associated risks. 
  • It often involves a longer, more complex sales process. 
Valuing your Freight Forwarding Business 

Factors that Influence Business Value in the Freight Forwarding Industry 

Understanding the factors that influence the value of your business is crucial for setting the right price when you’re ready to sell.  

In the freight forwarding industry, these factors can include: 

  • the size and profitability of your business 
  • the strength of your customer relationships 
  • the quality of your operations and infrastructure 
  • your position in the market 

Additionally, your company’s reputation, its growth potential, and the broader trends in the industry can also affect value.  
Remember, buyers aren’t just buying your current profits; they’re buying the future potential of the business 

Planning in advance for your exit can help you focus on these value-driving factors and position your business more attractively for potential buyers. 

The Process of Business Valuation 

Valuing a business isn’t as simple as looking at the balance sheet. And it’s where the experience of a business broker/advisor can make a huge difference.  
Because valuation is a complex process that requires a deep understanding of your business and the current market.  
Typically, a business valuation will involve analyzing your financial statements, assessing the value of your assets, and evaluating your business performance relative to similar businesses in the industry.  
If you plan your exit strategy early, you can use this valuation process as a guide to increase your business’s value over time. You can focus on improving financial performance, streamlining operations, and strengthening customer relationships, all of which can boost your business’s valuation when it’s time to sell.  
Once your valuation is complete you can choose the optimal time to sell based on market conditions, your business’s performance, and your retirement plans.  

Retirement and Selling Your Business 

As a Baby Boomer business owner, switching your perspective from aggressive growth or maximizing your income to planning for your retirement is a big transition. Here are a few recommendations to make it happen as smoothly and profitably as possible: Start Early: Initiate your exit strategy planning years in advance. This allows for business value enhancement and a smooth transition. It also offers the opportunity to make informed business decisions that align with your exit goals. 

  1. Explore All Options: From selling outright to setting up an Employee Stock Ownership Plan (ESOP), there are multiple exit strategies to consider. Reflect on your personal goals, financial situation, and the state of your business to choose the most beneficial option. \
  2. Engage a Business Broker: Experienced brokers can guide you through the process, help you understand the current market, value your business accurately, and find potential buyers. 
  3. Consider Financial Implications: Think about your preferred financial outcome—would you prefer a lump sum payment or a steady income stream during retirement? Both have pros and cons, so choose the one that best fits your retirement plans. 
  4. Enhance Business Value: Understand the factors that influence your business’s value and work on enhancing them. This could include improving financial performance, streamlining operations, or strengthening customer relationships.