Metro Detroit Business Owner Stories

Real case studies from Metro Detroit business owners who navigated exits, successions, and valuations. Names and identifying details are changed, but the numbers, strategies, and lessons are real.

Precision CNC ManufacturingOakland County, MI$4.2M Annual Revenue

Manufacturing Exit: From Owner-Dependent to Premium Sale

Outcome: Sold at 5.1x SDE (22% above initial estimate)

The Situation

A second-generation manufacturing company owner in his early 60s wanted to retire within 2 years. The business had strong revenue but was heavily owner-dependent -- the owner managed all key customer relationships, oversaw production scheduling, and handled all quoting. Initial valuation came in at 3.8x SDE.

The Approach

Over 18 months: promoted a production manager to operations director, documented all quoting processes and customer specifications, implemented a CRM to capture customer relationship history, and diversified customer base from 3 customers representing 65% of revenue to no customer above 18%.

The Result

The business attracted 4 qualified buyers. Sold to a strategic buyer at 5.1x SDE -- a 34% premium over the initial valuation. The owner transitioned over 6 months as a part-time consultant, and all 28 employees were retained.

Key Takeaway

Reducing owner dependency and customer concentration took 18 months but added over $400K to the sale price. Starting early is the highest-ROI investment in your exit.

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Commercial HVAC ServicesWayne County, MI$6.8M Annual Revenue

Family Succession: Keeping the Business in the Family Without Tearing the Family Apart

Outcome: Successful family transfer with 95% employee retention

The Situation

A 58-year-old founder had three adult children: one working in the business (operations manager), one with no interest in the business, and one who wanted equity but not daily involvement. Family tensions were rising over perceived fairness, and no formal plan existed.

The Approach

Created a comprehensive family governance agreement defining roles and compensation. Structured the transfer using a combination of gifting (utilizing the current $13.61M lifetime exemption before the 2026 sunset), an installment sale to the active child, and life insurance to equalize the other two children. Established a family advisory board meeting quarterly.

The Result

The active child took over as CEO with a 3-year mentorship transition. The founding owner reduced involvement to 10 hours per week within 12 months and fully stepped back after 24 months. Family relationships remained intact because the financial structure was perceived as fair by all parties.

Key Takeaway

The hardest part of family succession is the conversation, not the legal structure. Getting a neutral third-party to facilitate the initial family meeting prevented 2 years of avoided conflict from derailing the process.

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General DentistryBirmingham, MI$1.9M Annual Revenue

Practice Sale: Dental Practice Owner Discovers Hidden Value

Outcome: Sold at 85% of collections (15% above average)

The Situation

A dentist planning to retire in 3 years believed the practice was worth about 65-70% of annual collections based on conversations with colleagues. No formal valuation had been done. The practice had 2 associate dentists and strong patient retention.

The Approach

Formal valuation revealed the practice was worth significantly more than assumed because of: exceptional patient retention (94%), strong associate-led production (associates generated 55% of collections), modern equipment with recent investment, and a favorable long-term lease. We positioned the sale as a practice acquisition rather than a retirement sale, which attracted both individual dentists and DSOs.

The Result

Received 3 offers. Accepted an offer at 85% of trailing 12-month collections from a regional DSO, with a 2-year associateship agreement at $250K/year for the selling dentist. Total economic outcome was 35% higher than the owner expected.

Key Takeaway

Do not rely on industry rumors for your valuation. Many business owners significantly undervalue their businesses. A formal valuation identified $400K+ in value the owner did not know existed.

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Engineering & Testing ServicesMacomb County, MI$8.5M Annual Revenue

ESOP Transition: Selling to the Team That Built It

Outcome: $0 capital gains tax at closing (Section 1042 rollover)

The Situation

A C-Corp owner with 42 employees wanted to retire but felt conflicted about selling to an outside buyer. The management team had been loyal for 15+ years, and the owner wanted to reward them while also maximizing their personal financial outcome.

The Approach

After feasibility analysis confirmed the business could support ESOP debt service, established an ESOP trust that purchased 100% of the outstanding stock. The seller used a Section 1042 rollover to defer all capital gains by reinvesting in Qualified Replacement Property. The company secured bank financing for 70% of the purchase price, with the seller carrying a 30% note at market rate.

The Result

The owner received full fair market value for the business, paid zero capital gains tax at closing, and maintained income through the seller note. All 42 employees became owners, and the company has since grown revenue 22% as employee-owners became more engaged and productive.

Key Takeaway

For C-Corp owners with 20+ employees, an ESOP may be the most tax-efficient exit available. The Section 1042 rollover is one of the most powerful wealth preservation strategies in the tax code, and it aligns the owner's financial outcome with the best outcome for employees.

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