Episode
35
Thu, 10 Sep 2026 12:05:00 +0000
For many cabinet shop owners, millworkers, and trades business owners, the dream isn't necessarily to sell the company to a stranger.
You built something valuable. Your name may be on the door. Your family grew up around the business. And now one of your kids wants to take it over.
There's just one problem:
They can't afford to buy it.
That's the challenge Dominic Rubino explores with business exit expert Greg DeSimone.
And as Greg explains, the solution isn't always as simple as financing the sale yourself.
A business transition rarely happens overnight.
Even when the next generation is already involved, Greg explains that putting the documentation in place for an internal transfer can take several months. If the future owner still needs to develop important skills and experience, the entire process can stretch over several years.
Why?
Because knowing how to work in the business isn't the same as knowing how to run the business.
Your son or daughter might be excellent on the shop floor, managing installations, or overseeing production.
But can they sell?
Can they estimate?
Can they manage people?
Can they understand the financials?
Can they make strategic decisions?
Can they solve problems when you're no longer there to give them the answer?
Those capabilities matter just as much as the financial transaction.
One option is a seller note.
Instead of your child coming up with the entire purchase price immediately, you effectively finance some of the acquisition and receive payments over time.
That can solve one problem but potentially create another.
What happens if the business declines after you've stepped away?
Your child still has debt payments to make. If the company can't support those payments, you may face a decision you never wanted to make:
Do you step back into the company and try to fix it?
And if you've already been gone for several years, are you willing or even able to do that?
That's why the strength of the management team, documented processes, customer relationships, and the company's dependence on the owner all matter when structuring a transition.
Greg shares another approach based on performance.
In one example, a company had historically produced approximately $500,000 in annual profit.
After the owner's son became more involved, the business reached approximately $600,000.
But the son was only 26 and didn't have the money to simply purchase the company.
There was another complication: another child wasn't involved in the business.
Simply giving the company to one child could create problems within the family.
So they developed a performance-based structure.
The parents continued receiving the economic benefit associated with the company's established performance. Additional performance could then contribute toward the son's purchase of the business.
As he earned more ownership, his decision-making authority increased.
The important idea is that ownership wasn't simply handed over.
It had to be earned through performance.
Ownership and control can transition in stages.
That's important because a future owner may be talented and motivated while still lacking experience.
Greg describes creating guardrails around major strategic decisions during the transition.
As the successor earns a larger share of the company, they can gain greater authority.
That creates an opportunity to make real decisions and experience real consequences while the previous generation is still available to help.
The goal isn't to protect the next generation from every mistake.
It's to teach them how to think like an owner.
There's another issue every owner needs to consider before selling:
How dependent is the business on you?
If customers, employees, decisions, estimating, sales, and operations all depend on the owner, a buyer sees risk.
And risk can reduce value.
The same thing can happen when the company depends heavily on one key employee.
A buyer isn't simply purchasing your historical profits. They're evaluating whether those profits are likely to continue after ownership changes.
That means your people, systems, equipment, processes, and leadership team can all influence what someone is willing to pay.
Many owners know exactly how their company operates.
The problem is that the knowledge exists primarily in their heads.
Greg describes this as knowledge being passed along informally rather than through documented processes.
That's dangerous during a transition.
Your company needs repeatable ways to handle important activities such as:
The goal isn't to create a rule for every possible situation.
The goal is to build a company that knows how to think and operate without the founder being involved in every decision.
This may be one of the biggest differences between preparing someone to become a manager and preparing them to become an owner.
Don't just teach them what to do.
Teach them how to think.
Problems will change. Markets will change. Technology will change. Customers will change.
The solution that worked for you 10 years ago may not be the right solution 10 years from now.
A successful successor needs to know how to assess a situation, involve the right people, evaluate the numbers, make a decision, and adapt when something doesn't work.
Family businesses have another challenge: emotion.
Parents and children may have different ideas about where the business should go next.
One generation might want to protect what has worked for decades. The next might want to change everything.
Instead of turning every disagreement into a family argument, Dominic recommends building a culture where decisions are supported by data.
What does the investment cost?
What's the expected return?
What happened when we tested it?
What do the numbers tell us?
Experience and intuition still matter. But data gives everyone something objective to discuss.
If you want your kids to eventually take over your cabinet shop, millwork company, or trades business, don't wait until you're ready to leave to figure out how they'll buy it.
The financial transaction is only one part of the transition.
You also need to build the people, systems, processes, leadership skills, and financial strength that allow the company to thrive without you.
Because the ultimate goal isn't simply to transfer ownership.
It's to create a business the next generation is capable of owning while making sure you receive fair value for what you spent your career building.
More about Greg De Simone: Website | LinkedIn | Youtube
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