As a 2025 A/E/LS firm owner, deciding whether to keep or sell your business requires clarity and foresight. With updated SBA loan programs, rising interest rates, and evolving valuation multiples, your chosen path affects both your legacy and financial security.
The Step-Up Legacy Plan™ remains a powerful alternative to traditional ESOPs, enabling trusted employees to buy your firm using SBA-backed financing while you receive near 100% cash at closing. But how do you know if this plan or another exit strategy fits your situation?
This updated diagnostic test and action plan walks you through critical considerations—from operational readiness and valuation benchmarks to bank financing trends and legacy preservation challenges—so you can make a confident decision aligned with your retirement timeline and firm goals.
With a clear 5-7 year plan, you control the decision to keep or sell—securing your legacy and full payment at closing.
Determining whether to keep or sell your A/E/LS firm starts with an honest assessment of exit readiness. Many owners delay planning until retirement pressures mount, risking rushed deals or lost value. This diagnostic helps you understand key areas impacting your succession options.
1. Leadership & Operational Documentation
Do your key employees have clear job descriptions, policies, and documented procedures? Effective operational documentation reduces transition risk and reassures SBA lenders and buyers. A firm with strong leadership pipelines and documented workflows is more attractive for employee buyouts.
2. Financial Transparency & Valuation
Have you independently valued your firm recently? Updated 2025 market data shows EBITDA multiples for A/E firms averaging 4x to 7x, with revenue multiples around 0.75x to 1.1x, varying by region and niche. Transparent financials including backlog, WIP, and client contracts are essential for qualifying financing and maximizing sale proceeds.
3. Succession Timeline & Owner Goals
Are you in the 5 to 7 year planning window? Early multi-year planning enables leadership grooming, financial cleanup, and bank pre-qualification. Jumping into a sale with less than 2 years’ notice often results in suboptimal terms and reliance on seller financing or diluted legacy.
4. Financing Environment
With SBA 7(a) interest rates generally ranging from 10.25% to 13.75% in 2025 and guarantee fees reduced, SBA loans remain viable despite rising market rates. Employee buyers typically need 5% to 10% down, making seller carrybacks unnecessary under the Step-Up Legacy Plan™—a major advantage over ESOPs or buyer notes.
Understanding this roadmap equips you to explore alternatives realistically and avoid surprise obstacles that can derail exits.
Employee buyouts today are bankable, SBA-backed, and designed to pay you 100% cash at closing—no seller notes required.
Once you identify your readiness gaps, an actionable succession plan helps you close them systematically:
This disciplined multi-year process enhances buyer readiness, maximizes valuation multiples, and prevents reliance on seller financing or personal guarantees. Notably, it emphasizes legacy preservation by empowering employees who deeply understand your culture and client relationships.
Key points to consider:
The updated 2025 financing environment rewards disciplined sellers who invest in preparation and leverage the Step-Up Legacy Plan™ for a secure, full-payment exit aligned with their legacy goals.
Your A/E/LS firm is more than a business—it’s a legacy built on trust, culture, and client relationships. The decision to keep or sell impacts not only your financial future but the firm’s next chapter.
By starting a disciplined 5 to 7 year succession plan today—leveraging updated SBA loan programs and the Step-Up Legacy Plan™—you position yourself to receive near 100% cash at closing while empowering your employees to carry forward your vision.
Contact Allen Business Advisors to explore how this expert-guided, practical action plan can protect your legacy and maximize your retirement security in 2025.
