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Case Study 3: A Concrete Contracting Business

A 73-year-old father owner (57%) of a California concrete contracting company with one son owner (25%) and three minority owners (6%) needed help developing and implementing a comprehensive business financial plan to identify Exit alternative for the father while identifying income and estate tax savings techniques and strategies. In Dec 2017 the company hired Eric Donner for a formal 6 month Business Financial Planning engagement, which, due to emotional intelligence issues between father and son had to be extended 2 additional months. The engagement was to develop and deliver a formal written exit plan which consisted of the following:


  • A detailed professional assessment of three exit options including an ESOP, a sale to the son and the three minority owners and hiring an Investment Banker for a third-party sale. The pros and cons and the financial impact of each exit approach was provided in a written report. The execution of the selected strategy will require an implementation engagement targeted for 2019.

  • Implemented an emotional intelligence sub-engagement which included each owner taking a personality assessment test, custom business survey and one-on-one owner interviews culminating in an owner intervention and the resignation and immediate buy-out of the son’s 25% ownership equity.

  • After a thorough analysis of the company’s retirement plan, took-over the existing 401k/Profit Sharing Plan as part of a strategy to provide a $510k income tax deduction with $400k going to the primary owner.

  • Reviewed all corporate governance documents to find the company shareholder agreement was dated 1979 with inaccurate business valuations. Using BizEquity software and a financial analysis, identified an accurate business valuation range.

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