Internal Succession Math That Aligns Valuation and Cash Flow

Successful internal succession aligns price with the cash flow required to run and grow the business. We begin with a planning valuation grounded in normalized earnings, quality of revenue, client concentration, and the resilience of the growth engine. From there we design a capital stack that blends buyer equity, a fair seller note, and performance based sharing so obligations can be met without draining working capital.

Economics vest as leadership and client responsibility move to the next generation which keeps incentives pointed at retention and organic growth rather than a single transaction date. We refresh compensation so roles, accountability, and rewards match the future state, and we write down governance so decision rights and dispute resolution are clear. Communication with clients and partners follows a calm cadence that builds trust and reduces anxiety.

The result is a succession plan both sides can sign and operate with confidence because it pays for itself through retention and growth rather than wishful thinking. Graybridge builds the models, the term sheets, and the operating rhythm, and we work alongside your legal and tax advisors so structure and timing align with the realities of your firm.