Partner buys out 2nd Partner allowing them to re-strategize and save $36,063 a year in taxes, $2,000 in general expenses, and retain $100,000 of income.
Client Snapshot
Industry: PR Consulting
Gross Revenue: $717,000
Entity Type: S-Corp
The Challenge
The business had two partners, one of which wanted to exit the company to return to a prior employer. This would leave the remaining partner uncertain of client retention, contract pricing, and overall management of the company, which had been split between them. Each of them had different personal financial situations, which had also restricted their ability to select tax strategies that would benefit each of them differently.
Encurio’s Approach
Having worked with these partners for several years, we understood their needs and unique personal situations. Here’s how we approached this changing situation:
- Advised on buy-out of the partner
- Re-evaluated all company benefits, including retirement
- Advised on a new reimbursement policy
- Income shifting to other family members doing smaller jobs within the business
- Coached on pricing strategies and relationship transfer
- Collaborated with existing financial teams on transition
The Impact
The impact was different for each partner. The exiting Partner felt relief as the remaining Partner’s concern and fear subsided with proper support and project management from their financial team. Their friendship no longer felt strained.
The remaining Partner felt optimistic, in control, and capable of handling the entire business alone. The pricing and relationship transfer coaching helped them retain $100,000 of business they were contemplating discounting out of fear. They now make significantly more money and are on their way to retiring sooner to take care of their family.
To learn more about how Encurio’s strategies could improve your businesses finances, set a meeting with us.
