Case Study
David & Laura: Business Owners
Case studies are hypothetical in nature and do not represent scenarios or results experienced by actual clients.
Founders Approaching Exit
David and Laura, successful business owners, were preparing to sell the company they thoughtfully built over decades. Yet as they approached this monumental life change, they felt a nagging sense of uncertainty. Were they truly ready? Despite their hard work and success, considering this upcoming transition left them feeling scattered and unsure if they could maintain their lifestyle or fulfill long-held dreams like owning a lake home. They needed guidance to not only navigate the complex sale process but also to gain confidence that their financial future was secure.
Profile
- David and Laura, married business owners in their mid-50s with children.
- Asset portfolio includes their business (valued at 12 million), $2.2 million in 401(k)s, $1.2 million in joint investments, and debt-free home and business properties.
Primary Goals
David’s recent health concerns have accelerated their exit timeline. While the couple’s primary focus is maintaining their lifestyle in retirement, they’re finally allowing themselves to explore a long-held dream of owning a lake home. They are uncertain whether this aspiration, along with their desire to create a meaningful charitable legacy, aligns with their financial reality post-sale.
Challenges
“What’s our Freedom Score and will we be okay?”
David and Laura needed clarity on how much money they would need for a comfortable retirement. They were nervous that the business may not sell for enough to fund their need.
“Is our three-year timeline realistic?”
Given David’s health concerns and their retirement goals, they questioned whether their desired exit timeline was achievable to maximize their business value.
“How can we make our business more attractive to buyers?”
A significant concern was the business’s heavy reliance on David’s personal client relationships, with 60% of revenue concentrated among just five clients.
“What should we do with the proceeds after the sale?”
They sought guidance on converting their business equity into a sustainable investment portfolio that would provide reliable retirement income while preserving their wealth.
“Who can help us navigate this complex process?”
The couple recognized the complexity of their exit strategy and needed help assembling an expert advisory team to guide them through the process.
Discovery
We took David and Laura through our proprietary Freedom Roadmap planning process which revealed key priorities:
- Long-term financial security
- Family legacy
- Community impact initiatives
- Second home ownership
- Global travel opportunities
Our detailed business valuation established their current position and outlined strategies to bridge the gap between their existing $12 million valuation and the $15 million target sale (aiming for $10 million of after-tax proceeds).
Exploring “What-If” Scenarios
We explored various scenarios, including selling earlier or later, relocating, and different sale prices, allowing David and Laura to visualize a variety of outcomes, align their financial goals and ultimately boost confidence in their decisions.
The Freedom Solutions
1. Business Enhancement Strategy
Developed a three-year plan to elevate business value to $15 million.
2. Exit Preparation
Implemented strategies optimizing tax efficiency, maximizing savings, and maintaining timeline flexibility
3. Advisory Team Development
Assembled and coordinated specialized professionals for seamless execution
4. Investment Planning
Implemented a plan to grow their assets, support their lifestyle, purchase a lake home, and maintain assets up to age 100, with a $5 million legacy balance.
5. Legacy Planning
Established frameworks for business continuity, employee security, wealth transfer, and philanthropic impact
Conclusion
David and Laura are now positioned to successfully exit their business within three years. The clarity and confidence they gained transformed their outlook from scattered and uncertain to focused and optimistic. Their thoughtful exit plan not only ensures a smooth transition into retirement but also empowers them to embrace their dream of owning a lake home, create a meaningful legacy, and enjoy their retirement with peace of mind and purpose.
