Managing a business for a retiring owner with a written option to buy (example scenario)

What it costs to start

Amounts are itemized estimates. “Not verified” means we don’t have a defensible figure; it is not $0.

Ongoing costs

Financing

The purchase may be paid in owner-financed installments, from profit share, with a loan, or a mix; each is negotiated and none is guaranteed. SBA 7(a) loans can be used for complete or partial changes of ownership; check current SBA rules with a lender.

What you need

• Whatever the business already uses
• Helpful: An owner willing to sign a written option or buy-sell agreement — A verbal promise to "sell to you someday" is not an option. Many owners will not commit in writing.
• Helpful: Any license the business needs — Depends on the industry. Check whether the license must be held by the owner or a qualifying manager.

Licensing: Licensing follows the business and industry. When ownership changes, licenses and permits may need to be re-issued in the new owner’s name.

Skills that help: Operations and management, Customer service, Accounting or administration, Sales.

Time: Running the business for the owner is usually a full-time job.

Typical customer: The existing customers of the business

How it makes money: You are paid a salary or management fee while operating; later, you buy the business in installments or with a loan at the agreed price

Business model: Partnership, Existing business acquisition

Risks and downsides

• The owner can change their mind, sell to someone else or die without a clear written option and succession terms.
• Your work can raise the business’s value and therefore the price you pay, unless the price formula is fixed in advance.
• Low pay during the management period while your future equity is uncertain.
• Family members or heirs may contest the arrangement.
• You may later need to personally guarantee financing to complete the purchase.

Your first step

Then

1. Ask local business brokers, accountants or trade associations whether they know owners planning to retire without a successor.
2. Review three years of the business’s tax returns with an accountant before agreeing to a price formula.
3. Agree on a trial period with a clear review date before signing the option.
4. Talk to a lender early about how they would view financing the purchase later.

Sources and review

• Buy an existing business or franchise (U.S. Small Business Administration). Supports: Due diligence before buying, using an attorney and accountant, and common methods for valuing a business.
• 7(a) loans (U.S. Small Business Administration). Supports: SBA 7(a) loans can be used for complete or partial changes of ownership. Does not show whether any borrower qualifies.
• Business guide (licenses and permits) (U.S. Small Business Administration). Supports: Licensing and permit requirements vary by city, county and state.

Last reviewed October 18, 2026. Method: Itemized editorial estimate built from typical starter equipment and setup items. Cited sources support the requirements and context, not each dollar figure. Items we could not price defensibly are marked "Not verified" instead of $0. Local prices vary.