From an Uncertain Future to Peace of Mind

Recently I worked with a family who realized they needed a plan to move beyond operating in the unknown about their future.  They had no idea about the value of their business, how and when they would retire, how and when family members would take over running the company and what they would do after they made their exit. In business for 20 years, serving industrial and marine industries with metal fabrication services, the owner was starting to think about how to retire, but wasn’t sure if, how or when it was possible. 

This story is not unusual. It can be a tale of missed opportunity, risk and stress for business owners.  However, getting to a happy ending is not a fairy tale. With some work, organization and planning owners can find out where they stand financially, increase the value of their business and exit when and how they want to.

In this case study of a manufacturing family business, you can see the challenges, the solution and the steps we went through to provide a workable plan and peace of mind. After a valuation of their enterprise, the owner ended up with a written succession plan providing an exit strategy, improved corporate structures for 2 manufacturing companies and a real estate holding company. 


Click here to download a PDF version of the case study. 

The Client:       

The family manufacturing business consisted of the father as operating partner, and 2 sons. They have been in business for 20+ years serving industrial and marine industries with metal fabrication services.  The enterprise has grown organically and currently has a team of 25 employees. 


The owner, too busy and hands-on in the business, has not planned for retirement.  With no knowledge of the present day value of the business, he has no idea if the sale or transition of his business will provide him with proceeds to fund his retirement or how and when it will occur.  In addition, a lack of focus on value enhancement means ‘low-hanging’ business improvements were being overlooked. 

The share structure of the business was archaic, with no thought of transition, capital gains exemptions or risk avoidance.  Missed opportunities for savings were over-looked due to the inadequate organization of corporate documents. With a blended set of books between the 2 companies, the corporate accounting process didn’t allow for clarity around production costs and yields.  Job costing was impossible; so, profit margins unclear. 

Without a clearly articulated transition plan or timeline for succession from father to sons, and the sons still learning the ropes, the company was unprepared to operate without the father in the lead.

PHASE 1:         The Discovery Process

This first phase led to deep insights, where we found the current value,  gaps, goals, missing links and risk factors in the business and personal finances.  Learn more about the Discovery Process here.

The Solution:   

A written succession plan was essential for areas of responsibility for the family business from parents to the next generation.  It was necessary to establish corporate structures for the 2 manufacturing companies and a real estate holding company. 

Time Frame:    

The father will exit, and transition will occur to the second generation within the next 5 years.


Step 1:  Populate the Central Document Registry (secure cloud-based data file) with corporate documents that will enable pre-due diligence; a wholistic review and analysis of the enterprise from organizational chart to IP details to financial statements and more.

Step 2:  Engage other exit planning specialists to assist on file.  Initially, we added a medium-sized accounting firm to separate the financial records of the various companies.  This allowed for a clearer picture of each business and allowed us to determine individual costing and margins.

Step 3:  A valuation of the business was performed to ascertain the current value of each business unit.  With the expertise of a transition business lawyer, we worked with the team to determine a possible new structure.

Step 4:  Guidance was provided to the family to create a written transition plan including a timeline and areas of responsibility that were shared with all professional advisors.

Step 5:  A preliminary company structure re-organization plan was developed and presented to the family.

Step 6:  A risk assessment was performed to determine the tax cost of the transition and the effect of the loss of any of the key players.


The clients agreed to proceed with the reorganization of the share structure because they had greater certainty for the process, timing and peace of mind. There was clarity around tax ramifications and their ability to transfer the company in the future at the lowest tax cost.

Risks due to the potential loss of any of the shareholders or key players in the business were mitigated by insurance.

The parents are now working on a personal retirement and financial plan. They now have clear understanding of how and when they will be able to retire and have an accurate estimate of how that will be achieved financially, which has made planning for their retirement easier.

Client feedback:

The client has told us they are clear on the value of their business and how the transition will take place. They now understand the tax cost of transitioning and the structure to minimize taxes.  As a group they have peace of mind knowing most of the contingencies and risks were covered. They are now all following the written plan we created together. 

We were also told that Strategic Succession and referred team made the process easy. The Central Document Registry (CDR) created a high level of organization and transparency for all other professionals accessed thru the Trusted Advisor Network™ provided added and valuable expertise.

Time Frame:   This initial foundation and planning stage took 3 months.

Print off a PDF version of the case study

PHASE 2:          Value Acceleration of the Business

Now that a solid foundation and succession plan are completed, the family can start working on enhancing the value of the business.

Through the CDR and Valuation report, the owners learned areas to prioritize such as:

●        Customers: Address Customer Concentration

●        Process: Workflow Improvements  

●        Technology: Job Costing Software

●        Physical Plant: Efficiency of Shop Floor and Space Constraints

●        HR: Employee Manuals


Learn more about how we work with owners to build value in their companies.

John Robinson, CEO of Strategic Succession advises business owners on the process of how to prepare for succession planning and a profitable exit strategy. John has been helping business owners build value in their companies and optimize sale or succession outcomes for 35 years. He is a Certified Financial Planner (CFP), Elder Planning Counsellor (EPC) and Certified Exit Planning Advisor (CEPA) designation from the Chicago-based Exit Planning Institute.