Do You Have an Exit Strategy? Retirement Planning for Studio Owners
Last Updated on 18 September, 2025
When is it time to step back from your business? Even if you love what you do, most people don’t want to work full-time forever. The time to think about retirement planning arrives at some point for every business owner, and the transition is easier if you’ve got an exit strategy.
Choosing to close or sell is only part of the equation: think of your psychological readiness to hand over the keys and take some time to delve into your own life goals for those later years.
Don’t know where to start? We’ve got the basics.
Key takeaways: Graceful retirement planning
- Studio owners can sell, transfer, or close a business when ready to retire
- Retirement planning should include personal investments and business proceeds
- Psychological readiness is critical for a smooth transition
Succession Planning Options
You’ve got three main options to exit your studio business: sell, transfer, or close. But the right choice for you might come down to the details.
Option 1: Sell the Studio
You might choose to sell if you’d like to see your studio continue, even without you holding the reins.
The buyer typically takes on all assets and liabilities of the business, saving you the task of having to unload equipment and resolve vendor relationships as you would with closure.
You have a few options to structure a wellness studio sale:
- Outright sale: You transfer complete ownership to the buyer, who pays the purchase price in full immediately. This allows for a quick and complete exit.
- Gradual sale: You transfer ownership and operational control to the buyer, but they pay off the purchase price over time. Also called an installment sale, this works if you can finance a monthly payment plan and want to reduce the tax burden of the sale proceeds.
- Keeping a minority stake: You can choose to retain part ownership in the business while the buyer gets operational control and a majority stake. You might choose this option if you expect the new owner will grow the studio’s value over time.
You’ll want to speak with a lawyer to help you negotiate and finalize a sale. If you run a larger studio or have multiple locations, think about using a business broker to help you find the right buyer.
Option 2: Transfer Ownership
If you’d like to see a family member or employee take over the studio, you might transfer ownership. This can be structured as an internal sale, which looks a lot like selling to an outside party.
Personal relationships can make negotiations challenging, but you can find a structure that works for everyone—like a gradual sale to a mentee who knows the company but can’t quite afford an outright purchase.
If you want to transfer ownership to a family member, keep in mind estate and gift tax implications. In some cases, a sale might be a better option. A tax lawyer can give specific guidance.
Option 3: Close the Studio
If you’re ready to say goodbye to your studio, you can wind up the business entirely. The basic steps to close a studio business are:
- Discuss the timeline with your staff and clients
- File paperwork to dissolve your business legal entity (LLC, C-Corp, or S-Corp)
- Cancel licenses, permits, and leases
- Follow employment laws to issue final paychecks, severance paperwork, and payroll taxes
- Resolve outstanding debts
- Notify all relevant tax authorities and file final returns
- Keep all business records
The details of winding down depend a lot on where you’re located, so check out local chambers of commerce or business development resources for guidance.
Why might you close? Maybe you’re facing uncertainty beyond your control. Think of the COVID-19 pandemic: small businesses were hardest hit and more permanently closed compared to larger companies.
Even if your studio is thriving and not facing an external crisis, you might see closure as a simpler option compared to a sale or transfer.
Personal Retirement Planning
Studio owners should ideally have personal retirement accounts separate from their business assets. This can give you flexibility when assessing your exit options, since you’ll have your own nest egg to rely on when you need it.
Besides those investments, you can earn some passive income from the wellness studio even after a sale or transfer:
- Create an annuity: Put the sale proceeds into an investment vehicle that pays out interest at regular intervals.
- Keep a stake: A minority share in the business can become more valuable over time if the company continues to grow. But you’ll likely also be responsible for the studio’s liabilities.
It’s always best to start early, but it’s never too late to look at ways to create income for your retirement.
How Much Do You Need?
Retirement planning always takes a bit of math, but you can start with some rules of thumb. One guideline is to have cash and investments that total 10x to 12x your annual salary when you’re ready to retire.
That can sound like a lofty goal, but it’s based on the idea that you’ll spend about 70% to 80% of your pre-retirement salary when you’re no longer working (or running your business).
If you can start early, think about using these savings benchmarks:
| Age | Savings Goal |
| 30 | 1x annual salary |
| 40 | 3x annual salary |
| 50 | 6x annual salary |
| 60 | 8x annual salary |
| 67 | 10x annual salary |
There’s a lot to think about when you’re calculating how much you really need. If you’re in good health, you might anticipate lower out-of-pocket medical costs, but you might also have more years in retirement.
When you choose to hang up your ownership hat, it also has a big impact. If you’re in your 50s, plan for 20 to 40 years in retirement. If you’re in your 60s, 15 to 30 years is reasonable.
Your lifestyle also matters. What do you want to do in your later years? If you want to travel, expect to spend more than if you stick close to home. Debts, caring for older and younger family members, and whether you continue to earn some income, all ultimately influence how much money you’ll need.
Don’t forget you might be eligible for some government pension plans, even if you’ve run a business most of your working life. This can give you access to a bit more cash in your retirement.
Psychological retirement planning
It takes your full heart and soul to build a wellness business, so retiring might not come easily.
You might fear a loss of identity and loss of work that gives you personal satisfaction. Retirement means relationships change, so you might mourn the loss of friendships built around your studio.
If you have these feelings, you might still be ready to retire. But you might want to do some prep work:
- Hand off operational responsibilities gradually to a senior member of your team
- Plan to stay active in a role you love—like teaching classes or offering private sessions
- Consider new endeavors like career coaching or business mentorship
- Explore community involvement outside the studio
- Talk with a therapist or counselor to guide you through the transition
By slowly moving away from your wellness studio, you can transition to a fulfilling life in retirement with a new identity.
Choose to Retire Your Way
A smooth transition to retirement from your business starts with a well-executed exit strategy. Take your time, if you can, and consider creative ways to move from your business to your retirement life.
That might mean negotiating a Saturday morning yoga class so you can stay involved, a silent partner stake in the company, or making a clean break to start something completely new. The choice is yours: how will you enjoy what you’ve built?
WellnessLiving makes management transitions a breeze
If you do plan on selling or passing along your business, WellnessLiving can support you every step of the way. Our client management software, booking systems, and in-depth reporting all help you instill your business practices and ethics into the day-to-day management. Your regulars will still miss you, but they’ll appreciate how you’ve planned to care for them even after the sale.
You’ve supported your community for a long time; you deserve to spend time being supported by it as well. To see how WellnessLiving can help, reach out today to book a free consultation.
FAQs
Business owners may be eligible for the Canada Pension Plan (CPP) in Canada if they take a salary from the company. They can also contribute to individual retirement accounts like RRSPs. In the U.S., they may contribute to a Solo 401(k), which covers a business owner with no employees. They might also use other retirement accounts, such as SEP IRAs.
Small business owners may have personal retirement investment accounts. They might also plan to take annuity income from business sale proceeds or maintain a stake in the business when they retire.
Yes. You can close, sell, or transfer ownership of your business when you decide to retire. Small business owners should assess financial options and psychological readiness to retire.
