When A. Conrad Huffman was ready to retire from the Glendale, California, company that he co-founded with his wife, Helen, the succession seemed pretty straightforward. Their son, Eric W. Huffman, says he'd been groomed to succeed Conrad by working in every division of the company, Vege-Kurl, which specializes in making white-label cosmetics and other personal care products. By the late 1990s, Eric was ready and eager to take over.

Father and son worked out a deal that allowed Conrad to remain on the payroll as his son slowly bought the company stock, a process that lasted a decade. Vege-Kurl also brought in a partner who could handle inventory, accounting, and general management while Eric specialized in sales, market­ing, and R&D. The transition worked, and the company thrived. Now, two decades later, Eric is 58 and mulling suc­cession plans again, knowing that he and his partner want to retire in three to four years. "I have 110 employees, which means I have 110 families relying on me," Huffman says. "We take succession very seriously."

Planning how to hand off your business can be dizzyingly complex. You need to consider who can best run things--but also who can afford to buy you out. "The closer you get to the actual succession, the fewer opportunities you have to struc­ture the right sale, to save on taxes, to prepare your employees and yourself," says Joan Crain, global family wealth strategist at BNY Mellon Wealth Management, based in New York City.

So what should you be doing, and when should you do it?

Ten years out: Groom a successor

The more complex your business--and the more complex your ideal suc­cession arrangement--the longer you need to plan, as the Huffmans discovered. If you don't have a family member prepared to take over, consider whether a non­related employee can be groomed to operate your company and potentially buy it out over time. Promoting from within can build loyalty among your employees--and identifying a possible heir several years before your departure will give your successor time to muster the economic wherewithal to buy you out.

Five years out: Meet with money experts

Eric Huffman has spent the past three to four years talking to CPAs, attorneys, and other business advisers, in part to explore potential M&A options. If Vege-Kurl wants to consider a deal, it will need to show growth, either organic or through acquisitions--and to have several years of audited financial statements.

The process is what Chris Snider, chief executive of the Lakewood, Ohio-based Exit Planning Institute, calls the "value acceleration method­ology." He suggests that, at this point in your retirement planning, you formally check in on your business every 90 days and identify specific personal, financial, and business goals to achieve in each three-month "sprint."

One year out: Start talking

Once you've finalized a buyer or successor, it's important to communi­cate your plan to family, employees, and major customers. You especially don't want family members or other interested parties to feel blindsided by your plans, which might inspire an attempt to sabo­tage any potential deal. You also want to keep an eye on how employees will be affected; many deals have covenants that could be triggered if the business loses too many key employees or customers within a set period following the sale, warns Crain.

"If you are thoughtful about how you handle the process, you're going to get a lot more money for your business," says John Bird, president and co-founder of Albion Financial Group, a Salt Lake City-based investment and planning firm. "It's just like any­thing else. Your probability of suc­cess is much better when you plan."