Architecture Firm Ownership Transitions

Allen Business Advisors specializes in ownership transitions for architecture, engineering, and land surveying (A/E/LS) firms. We help architecture firm principals sell to their own people using SBA 7(a) financing so they get paid at closing.

Our target client is an A/E/LS firm with $1 million to $10 million in sales whose owner is ready to plan their exit. We first explore selling to your employees. If that is not viable, we run a structured process to sell to an outside buyer.

Why an internal sale often fits an architecture practice

Licensure narrows the field. In many states the people who can hold ownership in an architecture practice are licensed architects, which rules out a large share of outside financial buyers before a process even starts. Your senior staff are already licensed and already run the work, so the buyers you need are usually sitting in your own studio.

Value in a design practice also sits with people rather than equipment. Clients hire the principal and the project architects they trust, and an outside buyer discounts the price for the risk that those relationships walk out the door. When your own team buys the firm, the relationships, the licenses, and the design sensibility stay exactly where they are.

The obstacle is almost never willingness. It is that most architects assume they cannot afford to buy the practice. With SBA bank financing arranged, employees come in with as little as 5% down and the firm's cash flow repays the loan, not their personal savings.

What your firm is worth

Architecture firms trade on the cash flow they produce for the owner. A working rule of thumb is 5 to 7 times EBITDA, or 2 to 4 times Seller's Discretionary Earnings for smaller owner-operated practices. Where a specific firm lands depends on how repeatable the work is, how concentrated the client base is, and how much of the practice runs through the founding principal personally.

That last point is the one most principals underestimate. A studio that cannot function without its founder is harder to sell and sells for less. Reducing that dependence is the highest-return preparation step available, and it is worth starting three to four years before you intend to leave.

How we work

We are former commercial bankers, so we structure deals from the start to satisfy what a bank and the SBA will actually approve. The Step-Up Legacy Plan is our structured version of the employee buyout: sell to your employees, SBA bank financing is arranged, get paid at closing. Not an ESOP.

Ready to move? Start with how owners sell to key employees, or see the full range of A/E/LS ownership transition options. Looking to buy instead? Browse current engineering and architecture firms for sale.

Schedule a Confidential Consultation to discuss your situation.