Sixty-Five Is Not a Sale Date

Sixty-five is a retirement age. It is not a sale date, and yet most of the SME successions I see being prepared treat that number as if it were one.

The reasoning is simple, which is what makes it so sturdy: in Switzerland, the AHV state pension starts at 65, the pension fund pays out at 65, colleagues of the same generation stop at 65, so the company will be sold around 65. The 58-year-old owner who thinks this way is not wrong about the facts. They are wrong about the nature of the milestone. The reference age is a pension date, set by law for the whole working population, and it knows nothing about your order book, your workshop foreman or the cycle of your industry. It organises the payment of pensions. It does not organise the sale of a company. This is not a Swiss peculiarity: in Germany, where the statutory age is rising step by step to 67, the same reasoning simply anchors on 67. The number changes; the mistake stays the same.

First objection: "you need a date of some kind". Yes, but not that one. The right sale date answers two questions, and the owner's birthday is neither of them. First: is the company transferable today, meaning does it hold for three months without you, with figures a buyer can read without you sitting alongside? Second: is the market in your industry, right now, a buyer's market or a seller's? Imagine a precision engineering firm of 40 people in the Bernese Jura whose owner is 61; a case built for the example, not a client. It has just signed a four-year framework contract with a medical group, its number two has run production for two years, and the industrial acquirers in that sector are actively looking for capacity. Every condition for a good sale is in place at 61. Waiting until 65 to respect the retirement calendar means betting that all three conditions will still hold four years from now. In my experience, all three rarely do.

Second objection: "selling before 65 means giving up years of income". This is the argument that weighs most in the discussions I lead, and it deserves a close look. The owner's salary stops at closing, true. But it has to be set against what the sale itself brings: the price a company in full health obtains compared with one sold four years later with a thinner order book, and what the seller can still do with the years between 61 and 65, a paid handover period, a board mandate, another project. As for pensions, the law is more flexible than the reflex. In Switzerland, for example, the AHV pension can be drawn up to two years early or deferred by up to five; most pension funds allow retirement from 58 and deferral to 70. A pension buy-in, whose expiry date I have described elsewhere, is in any case easier to prepare at 60 than at 64. The pension calendar bends to the sale calendar; the reverse is what costs money.

Third objection, the most honest one: "I do not want to stop before then". That one I respect entirely, on one condition: that it is stated as what it is, a life choice, and not dressed up as an objective timetable. Someone who wants to work until 68 has every right to. They simply need to know what they are buying with those years: a company that, unless something is done, will remain dependent on them to the end, and a buyer who, when the time comes, will take that into account.

Because that is the other side of the problem, and it gets less attention. The buyer knows the retirement age too. When an owner of 66 or 67 puts a company on the market, the acquirer does not read "maturity", they read "seller in a hurry". They know the alternatives shrink year by year, that health can intervene, that the seller's bank is sometimes growing impatient as well. What I observe in the files I work on is not a mechanical discount one could put a figure on; it is a change of posture. Terms harden: more warranties, more deferred price, a longer earn-out, a handover period that stretches just when the seller wanted to stop. The cost of waiting is not paid only in price; it is paid in negotiating room.

There is, finally, a quieter effect of this confusion: it delays everything else. The owner who has decided to sell "around 65" pushes to the same horizon the work that makes the company saleable: building a management team, documenting, cleaning up the accounts. At 63 they start. At 65 they discover that these projects take two or three years and that the right time to start passed long ago. They sell at 68, on the terms described above.

I am not arguing for selling early. I am arguing for unhooking the sale date from the retirement age and hooking it back onto what actually determines it: the state of the company, the state of the market and, last, the owner's personal plans. That date can fall at 58 as easily as at 70. What it cannot be is a number taken from a pensions act. The company does not know how old you are. The market knows very well.