Your key employees already understand your firm's values, clients, and projects. With the right financing, they can become owners while you receive 100% cash at closing, preserving your legacy and securing your retirement.
The Step-Up Legacy Plan™ offers a simpler, faster alternative to traditional ESOPs, tailored for A/E/LS firms with $1M to $8M in revenue. It removes the complexity and delays associated with seller financing or installment payments.
In a changing SBA lending environment and evolving deal landscape, this plan equips you to exit with confidence, ensuring business continuity and rewarding your trusted employees.
Your employees can own the firm you built—and you get paid 100% at closing with proven SBA financing.
Succession planning for architecture, engineering, and land surveying firms requires a clear, bankable strategy that spans 5 to 7 years. Early and disciplined planning allows you to groom key employees, clean up financials, and structure a deal that maximizes value while preserving your legacy.
Step 1: Leadership Development & Financial Cleanup (Years 1–2)
Identify and mentor your senior key employees who can manage and eventually own the firm. Simultaneously, strengthen your financial records by documenting backlog, work-in-progress, and client retention metrics. Clean, detailed finances bring clarity to SBA lenders and buyers.
Step 2: Formalize Contracts & Client Guarantees (Years 2–3)
Secure client commitments through contracts and guarantees that ensure recurring revenue streams and reduce perceived risk for lenders. These steps help employees qualify for financing and boost valuation multiples.
Step 3: Bank Pre-Qualification & Financing Design (Years 4–6)
Begin conversations with SBA-approved lenders familiar with A/E/LS firms. The SBA 7(a) loan program has grown substantially, with over $27.5 billion approved in 2023 and an increased focus on smaller loans under $500,000 — a perfect fit for employee buyouts.
The Step-Up Legacy Plan™ leverages these SBA loans to deliver seller payment at closing, eliminating the need for you to carry seller notes or personal guarantees. Your employees qualify for bank financing with just 10% down, preserving everyone’s interests.
This approach is also competitive with the modern PE and strategic buyer climate, where many firms face acquisition pressures but find employee ownership more aligned with long-term firm values.
The Step-Up Legacy Plan™ transforms employee buyouts from complex to practical, securing your legacy and financial goals simultaneously.
Valuation multiples for A/E firms remain robust in 2024 and 2025, with median EBITDA multiples around 5.5x for engineering firms and upper quartiles reaching 7.5x. Federal infrastructure funding and industry consolidation are key drivers. Properly positioned employee buyouts allow owners to capture this value fully.
Seller financing alternatives complement SBA loans too. While seller notes are common, they carry risk and tie up capital. The Step-Up Legacy Plan™ avoids these pitfalls and integrates recent SBA policy enhancements, making bank financing more accessible than ever.
Post-transition talent retention is critical. Employees who become owners are incentivized to continue growing the firm, maintaining client relationships, and cultivating culture. This ensures the firm thrives after you exit.
Implementing this plan requires professional advisory and banking expertise. Allen Business Advisors specializes in aligning A/E/LS firm owners, employees, and lenders to architect deals that protect legacies and provide financial security.
By following this disciplined approach, you can confidently sell your firm, retain your legacy, and enjoy a secure retirement.
Your A/E/LS firm’s future is valuable, and your legacy deserves protection through a well-structured succession plan. With the Step-Up Legacy Plan™, you can exit on your terms, receive cash at closing, and empower your employees to lead.
Planning 5 to 7 years ahead maximizes your firm’s value and financing options, reducing risk and ensuring continuity. Reach out to Allen Business Advisors to explore how this proven strategy can work for your unique firm and situation.
Secure your legacy while unlocking full payment—your succession journey starts now.
