Transition Blueprint Day · Sample blueprint

Selected pages from a sample Transition Blueprint.

The Transition Blueprint is the written plan you get about a week after Transition Blueprint Day. It sets out how ownership moves: to whom, in what pieces, over what period, in what order, and what to take to your CPA and attorney. Here are four selected pages from the written plan.

The sample company

Ray (64) and Dale (59) own Sample Harbor Mechanical, a $9.2 million commercial HVAC contractor, 70/30. Dale wants out within two years. Ray wants to step back by 67, give his son Tyler a real shot at owning it, and keep Marcus, who runs service.

Sample: a fictional company. Names and numbers are invented.

02 The options

The options on the table

Four real options. Each one is scored against the five goals Ray and Dale gave us, then the trade-offs for this company.

Option	Dale out by 2028	Ray steps back by 67	Tyler's chance	Marcus stays	Name stays
A. Sell to an outside buyer	Yes	Partlybuyer wants him 1–3 yrs	No	Unsure	Buyer's call
B. Hand it to Tyler now	PartlyTyler can't fund it	Partlystill on the bonds	Too soon	At risk	Yes
C. Sell to Marcus and Tyler, all at once	Partlypaid over many years	Partlybig note to wait on	Yes	Yes	Yes
D. Staged: Dale, then Marcus, then Tyler in pieces	Yes	Yesmoney comes slower	Yes, if earned	Yes	Yes

ASell to an outside buyer

What it gets you: The most cash, soonest. Dale is out on time.
What it costs you: Buyers usually want Ray for one to three years and tie part of the price to later results. Tyler doesn't get it. Buyers pay well for service contracts; the contractor relationships that live in Ray's phone are worth less to them.
For Harbor: A real option. Keep it as the backup.

BHand it to Tyler now

What it gets you: The family keeps it. The fastest change at the top.
What it costs you: Tyler hasn't run estimating or a P&L, and the big customers don't know him yet. He can't fund Dale's share, so the company pays anyway. Ray stays on the bonds and the bank line with less say. Marcus would report to someone 15 years younger.
For Harbor: Right destination, wrong year.

CSell to Marcus and Tyler, all at once

What it gets you: The company, the name and the crews stay. Service and construction are both covered.
What it costs you: Neither can pay cash, so the whole price comes out of future profit. Ray and Dale would both be waiting on notes from the same company at the same time. One bad year hits both of them.
For Harbor: Right people, too much at once.

DStaged combination

What it gets you: Dale out on his clock. Marcus tied in. Tyler earns it. The outside sale stays open.
What it costs you: Five years. Ray stays on the bonds and the bank line until about 2031. His money arrives slowly and depends on the company doing well. It needs written milestones and the discipline to use them.
For Harbor: Recommended. The full plan lays out the path and the order of decisions.

Also looked at: an employee stock ownership plan. At 40 people and this size, the setup and yearly upkeep are heavy for what it would do here. We set it aside. Your CPA can tell you if that changes.

Sample blueprint. Invented company, people and figures.Selected page 1 of 4

05 Who gets what

Who gets what, in what pieces, over what period

Illustrative. Every step is priced by an appraisal at the time it happens, so the dollars will change. What matters here is the shape: who, how much, when, and how it gets paid. This table assumes the company buys Dale's share. If Ray buys it instead, the percentages come out the same; what changes is who owes Dale the note.

When	What moves, and how it's paid	Ray	Dale	Tyler	Marcus
Today	Ownership as it stands	70%	30%	—	—
Dec 2027	Company buys Dale's 30%. $285,000 at closing, $1.2 million over five years.Dale's units are retired, so Ray holds all the units left.	100%	0%holds the note	—	—
2028	Marcus buys 10% from Ray. Small down payment, the rest over seven years, mostly from his share of profit.	90%	0%	—	10%
2028	Tyler's first 10% from Ray. Gift, sale, or some of each: a question for the CPA and attorney.	80%	0%	10%	10%
Dec 2029	Checkpoint passed. Tyler's next 15%, same method as 2028.	65%	0%	25%	10%
2030	Tyler buys 20%, Marcus 10%. Sold on a note from Ray.	35%	0%	45%	20%
Dec 2031	Ray's last 35%: Tyler 25%, Marcus 10%. Sold on a note from Ray.	0%	0%	70%	30%

Can the company carry Dale's buyout?

Illustrative planning numbers, not an appraisal. The real price comes from the independent appraiser.

Planning value (illustrative): $1,100,000 × 4.5 = $4,950,000 Dale's 30%: $4,950,000 × 0.30 = $1,485,000 The 2012 formula: about $570,000 (30% of book value) At closing, from company cash: $285,000 Note to Dale, over 5 years: $1,200,000 ÷ 5 = $240,000 a year Interest at an illustrative 7%: 2028: $84,000. Falls to $16,800 by 2032. First year's payment: $240,000 + $84,000 = $324,000

What that means: $324,000 is about 29% of a normal year's adjusted earnings. Workable in a normal year. Tight in a bad one. That's why the note needs a written plan for a bad year, and why the surety sees it first: paying out $285,000 and taking on a $1.2 million note lowers the equity the surety looks at when it sets your bonding line.

The building is not in this table

Harbor Yard Properties stays with Ray and Dale, 70/30, under a new 10-year lease at market rent, so whoever owns the company has a home. At today's rent, Dale's share is $3,300 a month before building costs, and Ray's is $7,700. Dale wants out of the business, not out of the rent check. Who owns the building after Ray and Dale is a question for the attorney and CPA.

Sample blueprint. Invented company, people and figures.Selected page 2 of 4

07 Your team

Gaps in your professional team

Who is on the team today, and what is missing for a transition this size.

CPAToday: Does the returns well.Gap: No one there has done an owner buyout or a family transfer in a contracting company. Keep them for the returns; add a CPA with that experience for the next two years.
Business attorneyToday: Handles contracts and liens. The 2012 buy-sell was drafted by a lawyer who has since retired.Gap: An attorney who does ownership transitions, for the buy-sell, Dale's buyout, and Marcus's agreement.
Estate attorneyToday: Ray's will is from 2009. Everything goes to his wife, then split between Tyler and Carla.Gap: As written, Carla could end up owning half of Ray's share. Fix in 2027.
Business appraiserToday: None.Gap: An independent, credentialed appraiser. Needed in the first 90 days, and again before each step.
Surety agentToday: A good agent, a long relationship.Gap: Timing, not the person. Bring them in before Dale's closing, not after.
Insurance and bankToday: Dale's buy-sell life policy lapsed in 2019. The bank hasn't seen any of this.Gap: New insurance to fund the three-owner buy-sell. Check the loan agreement for limits on buyouts before December 2027.

In a real Blueprint, each gap names people we have worked with who can fill it. Names are left out of this sample. We take no referral fees from anyone we name.

Sample blueprint. Invented company, people and figures.Selected page 3 of 4

08 The next 90 days

The first three things, in the next 90 days

Three things, each with a date, in this order. Everything after them depends on them.

Sign one page on how Dale's price gets set.Independent appraisal, both bound by it. Hire the appraiser this month. It ends the argument before it starts.By November 15
One meeting: CPA, attorney, Ray and Dale.Bring the Blueprint's questions for the CPA and attorney. The first two, who buys Dale's share and how a five-year note to Dale works, need answers before June, because everything after depends on them.By December 15
Sit down with Marcus.Ray and Dale together. Tell him the plan, ask if he wants in, and put a stay agreement in place while his buy-in is designed. Before someone else asks him first.By January 15

Sample blueprint. Invented company, people and figures.Selected page 4 of 4

Design your transition before you find the buyer.

One day with the owners only, on how ownership moves: to whom, in what pieces, over what period, and where the tax bills land. The written plan follows about a week later. Fixed fee. We are not brokers: no listing, and no percentage of a sale.

Ask about Transition Blueprint Day