Case Studies For Business Owners

Every situation is different. Every story is different. That’s the challenge — and the thrill. Here are three hypothetical* stories about three business owners and how we might help them strategize a comfortable future.

  1. Selling the business to family members 
  2. Converting the business into a prosperous retirement
  3. An innovative approach to transferring ownership

1. Selling the business to family members

The client built a family dry cleaning business with his dad. Several decades later, the business had blossomed into a 70-person operation with multiple North Bay locations and significant real estate holdings.

Then came the moment to look at his future. In this situation, we would analyze a range of scenarios and ask some fundamental questions. What was his family situation? What kind of life does he want to live? How much income does he need to live that lifestyle?

A primary component of the strategy in this situation came in the form of a charitable remainder trust. The client sold a 12- unit apartment building that took a lot of his time to manage and moved to a luxury apartment in a high-value neighborhood. He ended up with a great view and no management hassles.

He also was able to sell his dry cleaning business to his daughter at an affordable price. While the daughter got the business, the client got major equity out of the business and doubled his income.

2. Converting the business into a prosperous retirement

In 1983, this client bought a bankrupt construction supply company. He cut out the middleman and started selling direct to contractors. The business took off and expanded around the Bay, especially after the Loma Prieta earthquake in 1989 and resulting construction boom.

An ongoing concern of the client was having enough capital to retire comfortably. In 1998, out of the blue, he received a generous offer to buy his business. Working in concert with his CPA, his attorney and a business acquisition expert, we would help him dissect the offer and identify the pros and cons of selling.

After he decided to sell, we would then take him through the process and structure a tax-favorable deal. He stayed on with his company for several years as a consultant. Suddenly, however, our client found himself with a lot more free time and a lot more money.

From there, we would focus our attention to developing an investment strategy for him.  Now he’s retired, living comfortably and free of his concerns about outliving his capital.

3. An innovative approach to transferring ownership

In some situations with our experience with business owners, we begin working with them as a sounding board on tax and estate planning, spearheading a team that included estate and business employment attorneys. In this scenario, we guide clients  through financial planning and help invest liquid assets to support long-term goals.

This client owns a commercial flooring business focused on working with REITs, realtors and developers. The business has operations in San Jose, the East Bay and Sacramento. When it became too large and complex for the managerial skills of our client, he decided to look for a buyer.

In this example, we would bring in a consultant to help advise on the sale of the business. He cleaned up the balance sheet, put people and procedures in place, and generally made the business more attractive to potential buyers. We would help bring in another consultant to identify the right type of buyers.

If a first deal fall through, we would help facilitate a new and innovative one. In the new arrangement, the client and the prospective buyer would form a staged partnership. Investors will put in money and the client will receive a percentage of the growth over several years.

The new deal is structured to ensure a smooth transition and the continued financial health of the business. By doing so, it is designed to maximize the value of the client’s equity as he transitions out of the business into the next phase of his life.


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*Case studies are hypothetical and not based on real clients.