Meet our client:

Mike Baumgartner, President and CEO

Mike was 65 when we first met him and 72 when we celebrated his transition out. Mike, like a lot of our clients, didn’t know where to start. He struggled with the idea that employees could cash him out. He knew how much they made and spent.  His kids didn’t have a desire to take over the business and they were well established in their own lives outside of the state. Lastly, he didn’t want to sell his business. He didn’t want a new buyer coming in, changing the culture, driving off his people and losing his legacy.  Mike was stuck.

Overview

Plan Facts

  • Mike is 65, 3 grown kids (no interest)

  • 3 key employees

  • 15 critical, but not key, employees

  • 48 employees

  • Revenue of $28MM

  • EBITDA of $1.1MM

  • Current business value could not meet his retirement needs

Results

  • Retained and motivated key employees

  • Increased EBITDA to $2.8MM

  • Sold to Key Employees

  • Business continuity and legacy are intact

  • Mike is on the Board of Directors

  • Mike found financial freedom and emotional relief

Mike was introduced to us by his financial planner. His financial planner was concerned that, as Mike ticked off another birthday, he was not going to be able to maintain his lifestyle “post retirement” unless he found a way to pull more cash from his business. After our initial meeting with Mike, we quickly realized that he had been thinking about ways to take a step back, work less and spend more time with his spouse and their kids, but was having a hard time squaring up the idea of spending less time in the business while asking his employees to help him making more money.  Mike wanted to design a plan that would allow him to work fewer hours, create financial controls and monitoring along with establishing clear decision-making framework for the times when he would not be in the office.   

As we continued our work with Mike, we found that he was open to new ideas of growth. We helped him modify his communication with his Key Employees to stay focused on metrics, process and actionable steps. This allowed Mike to quickly determine if he needed to continue to monitor the project or take a step further away.

Ultimately, through the design and implementation of an exit plan, Mike was able to sell his business to his Key Employees over the course of 5 years and have a liquidity event in year five that met his personal financial goals, all while remaining in control of his company.

If you would like to learn more about selling your business to Key Employees, please contact us today.

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