June 23, 2025

What Happens to a Business When the Owner Retires?

What Happens to a Business When the Owner Retires?

What Happens to a Business When the Owner Retires?

With half of owners nearing retirement, the future of their companies — and workers — hangs on what they do next.

Some companies are built to flip, while others are intended to last for generations.

But staying in business doesn’t always make the most financial sense. Sometimes all arrows point to selling off the assets, dividing the proceeds, and moving on. And yet, more often than one might expect, something deeper keeps these businesses going. Despite the evergreen conflicts between labor and capital, a bond is nevertheless formed in the workplace between workers and bosses. That doesn’t mean there’s never any tension between management and staff, but in well-run shops, there’s usually a sense of collective responsibility, a shared trust, a feeling that everyone is motivated to carry the whole thing forward. 

So what happens when it’s time for the owner to step back?

Lately, it’s been a question that keeps surfacing. More than half of the country’s business owners are over the age of 55. As a wave of retirement approaches, thousands of companies across the country are quietly facing existential questions

Who will take over? What would they inherit? And what, if anything, makes this business worth keeping alive?

Whatever decisions are made will end up affecting millions of employees and their communities. One recent study cites 38% of small business owners who have no succession plan. Among those, one-third say they wouldn’t even know where to begin. 

That kind of uncertainty shows up everywhere, from hiring and retention to investment decisions and overall morale.

A Company’s Legacy Comes in Many Forms

While family businesses can often take center stage in these conversations, the truth is that you don’t need your name on the sign to feel like what you’ve built is worth preserving. What matters is the culture you’ve created, the people who’ve stayed with you, and the sense of meaning woven into the everyday.

Across the country, businesses are being passed down from parent to child, mentor to apprentice, founder to operator. Some transitions are formal. Others unfold gradually, without ceremony. But the connective tissue is a mindset: this matters, and it’s worth protecting. And on a more practical level, it sure beats working for someone else.

Take King Arthur Baking Company in Vermont, for instance: a 200-year-old business that transitioned to employee ownership while staying true to what made them successful in the first place. 

“Everyone truly does have a stake in the business,” CEO Karen Colberg told the Associated Press. “Everyone has a right — and I take this so seriously — to express any concern about what we’re doing and how we’re doing that . . . There’s that spirit of, ‘We’re all in this together.’ It’s definitely powerful.”

Another example of values-led succession planning comes from Zingerman’s, the legendary deli in Ann Arbor. Rather than franchising, selling, or handing the business over to relatives, the co-founders chose to transfer ownership to an employee ownership trust. The move to an EOT structure was designed to keep the company independent and reward longtime employees. It was a way to preserve the culture they spent decades building.

The trust was created in 2015 and includes ownership from founders Paul Saginaw and Ari Weinzweig, chief accounting officer Ron Mauer, and a growing number of employees who’ve chosen to buy in.  

Profits are distributed annually to employee-owners. If someone leaves the company, their share is sold back, keeping ownership contained within Zingerman’s itself. As of 2023, about a third of the 750-person workforce has joined. That number is expected to grow as the founders continue to step back and more of the company transitions to shared ownership.

Why’d They Do It?

The impetus for this decision between the owners came at a moment they shared on a bench outside the deli. 

“But what if we both die?” Saginaw wondered aloud, which instigated a series of conversations about the future of the company. “I realized we had no real succession plan,” he recalled to the Ann Arbor Observer, “and that the flippant answer, ‘Death is my exit plan,’ that I used to give was irresponsible.”

The trust model ensures that Zingerman’s will continue to be run by people who understand its mission, rather than outside investors or absentee owners. 

This Kind of Succession Planning Is Becoming Urgent

For many, it’s unfamiliar terrain. As New Jersey Business Magazine noted earlier this year, even taking the first step (talking to an advisor or an attorney) can be enough to shift the weight and start a path forward.

Because what gets passed down isn’t only a matter of who controls what. The daily decisions, long-term trust, and shared sense of purpose obviously need to belong to people who care, and who want to belong. And who want to continue to belong.

For those who care about that culture, there are ways to honor it. Offering retirement benefits, for example, can be one way of saying: You helped build this. You deserve to share in what it becomes. Another method is carving out leadership opportunities for long-tenured employees: the ones who already carry the business in spirit, even if not yet in title.

Then, of course, there’s the ownership itself. Eventually, someone has to hold the keys, and how that decision gets made says everything about what kind of future the business is built for.

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This isn't your standard 401(k).

Meet the 401(k) that actually gets your team retirement ready.

This isn't your standard 401(k).

Meet the 401(k) that actually gets your team retirement ready.

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The accounts, strategies and/or investments discussed in this material may not be suitable for all investors. The appropriateness of a particular account or investment strategy will depend on an investor’s individual circumstances and objectives. Investors should carefully consider their investment objectives and risks, as well as charges and expenses of Basic Capital before investing. Basic Capital investments should only be part of your overall investment portfolio.

This website provides preliminary and general information about the Securities and is intended for initial reference purposes only. It does not summarize or compile all the applicable information. This website does not constitute an offer to sell or buy any securities. No offer or sale of any Securities will occur without the delivery of confidential offering materials and related documents. This information contained herein is qualified by and subject to more detailed information in the applicable offering materials.

Any financial projections or returns shown on the website are estimated predictions of performance only, are hypothetical, are not based on actual investment results and are not guarantees of future results. Estimated projections do not represent or guarantee the actual results of any transaction, and no representation is made that any transaction will, or is likely to, achieve results or profits similar to those shown. In addition, other financial metrics and calculations shown on the website (including amounts of principal and interest repaid) have not been independently verified or audited and may differ from the actual financial metrics and calculations for any investment, which are contained in the investors’ portfolios. Any investment information contained herein has been secured from sources that Basic Capital believes are reliable, but we make no representations or warranties as to the accuracy of such information and accept no liability therefore.

Basic Capital is not a bank. Certain services are offered through Plaid, Fragment, Apex and Footprint and none of such entities is affiliated with Basic Capital. By using the services offered by any of these entities you acknowledge and accept their respective disclosures and agreements, as applicable.

Articles or information from third-party media outside of this domain may discuss Basic Capital or relate to information contained herein, but Basic Capital does not approve and is not responsible for such content.

The description of our investment policy and eligibility criteria is provided solely to outline the parameters of our platform and the types of assets it may support. This information is for informational purposes only and should not be construed as investment advice, a recommendation, or an offer to buy or sell any security. Participation decisions are the sole responsibility of each investor, who should rely on their own judgment and, where appropriate, the advice of independent professional advisers.

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© 2025 Basic Capital. All rights reserved

No communication by Basic Capital Group Inc. ("BCG"), or any of its affiliates (collectively, "Basic Capital"), through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice, except for specific investment advice that may be provided by Basic Capital Advisors, LLC pursuant to a written advisory agreement between such entity and the recipient.

The accounts, strategies and/or investments discussed in this material may not be suitable for all investors. The appropriateness of a particular account or investment strategy will depend on an investor’s individual circumstances and objectives. Investors should carefully consider their investment objectives and risks, as well as charges and expenses of Basic Capital before investing. Basic Capital investments should only be part of your overall investment portfolio.

This website provides preliminary and general information about the Securities and is intended for initial reference purposes only. It does not summarize or compile all the applicable information. This website does not constitute an offer to sell or buy any securities. No offer or sale of any Securities will occur without the delivery of confidential offering materials and related documents. This information contained herein is qualified by and subject to more detailed information in the applicable offering materials.

Any financial projections or returns shown on the website are estimated predictions of performance only, are hypothetical, are not based on actual investment results and are not guarantees of future results. Estimated projections do not represent or guarantee the actual results of any transaction, and no representation is made that any transaction will, or is likely to, achieve results or profits similar to those shown. In addition, other financial metrics and calculations shown on the website (including amounts of principal and interest repaid) have not been independently verified or audited and may differ from the actual financial metrics and calculations for any investment, which are contained in the investors’ portfolios. Any investment information contained herein has been secured from sources that Basic Capital believes are reliable, but we make no representations or warranties as to the accuracy of such information and accept no liability therefore.

Basic Capital is not a bank. Certain services are offered through Plaid, Fragment, Apex and Footprint and none of such entities is affiliated with Basic Capital. By using the services offered by any of these entities you acknowledge and accept their respective disclosures and agreements, as applicable.

Articles or information from third-party media outside of this domain may discuss Basic Capital or relate to information contained herein, but Basic Capital does not approve and is not responsible for such content.

The description of our investment policy and eligibility criteria is provided solely to outline the parameters of our platform and the types of assets it may support. This information is for informational purposes only and should not be construed as investment advice, a recommendation, or an offer to buy or sell any security. Participation decisions are the sole responsibility of each investor, who should rely on their own judgment and, where appropriate, the advice of independent professional advisers.

Our site uses a third party service to match browser cookies to your mailing address. We then use another company to send special offers through the mail on our behalf.

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© 2025 Basic Capital. All rights reserved