Case Study

When Tragedy Derails an Ownership Exit Plan, A Creative Approach Was Needed

The Challenge:

After 15 years of running their niche consulting firm, one of the two co-founders unexpectedly passed away in the middle of pursuing the sale of the company.  The remaining owner was forced to face some harsh realities, rethink everything, and find a different path forward as he was ready to sell.

Mayhill’s Involvement:

By asking the right questions and listening carefully to the answers, Kevin helped this business owner gain clarity around his priorities, recognize the real obstacles to a successful sale, and find innovative solutions to overcome them. 

The Mayhill Approach:

Diagnose the company's health, value and future opportunities.

Opportunities & Threats:

Management Team:

  • Under-developed people-management skills
  • Lack of organizational leadership experience
  • Unproven strategic abilities

Although the owner wished to create a path to company ownership for his loyal direct reports, he had failed to ensure their readiness to do so. There were significant gaps in management bench strength, in spite of the team’s exceptional technical talents and commitment to the company’s success.


  • Historically stable market environment
  • Client willingness to outsource

Healthcare related consulting services has historically been extremely stable, and capable of withstanding virtually any kind of economic environment. 

Large clients within this sector are inclined to see value in outsourcing to service providers like this company.


  • Commodity orientation of marketplace
  • R&D process lacked discipline

In an industry in which most service offerings are treated as commodities, this firm’s superior consulting talent has distinguished itself within the marketplace.   Yet 5+ years after a decision to invest heavily in a proprietary new service offering, its traction in the marketplace was limited due to a lack of market intelligence and emerging competitor service offerings.

Technology Adoption:

  • Minimal digital recordkeeping
  • HR & benefits records were disorganized, and paper bound
  • Ineffective digital marketing, lead tracking, reporting, and relationship management.

Documentation of key decisions, performance metrics, and organizational processes was largely paper bound. Critical corporate documents, including client contracts, were in paper format, with multiple copies, and equally difficult to store and retrieve efficiently. 

Not surprisingly, this lack of digital dexterity resulted in severely limited measurement and reporting capabilities.  It also had begun to create increasing regulatory risk to the organization.


  • Industry wide reputation and respect
  • Limited ownership, leadership, succession planning

Both co-founders had earned industry-wide reputations as visionary, savvy innovators and, under their leadership, their firm had become a trusted service provider. Yet the company had no ownership succession plan, leadership succession plan or consistent leadership team practices.

Customers, Concentrations:

  • Severely limited client diversification
  • Major client relationships personally managed by the owner
  • Very few prospects existed outside of Minnesota

Due to the unique regulatory structure of their historical client base, the firm’s client and prospect universe was largely limited to the state of Minnesota. 

An over-reliance on a small handful of highly profitable clients who accounted for 95% of the business’s revenue existed.

Financial Results:

  • Outdated, out of sync hiring practices
  • Poor revenue and expensive forecasting and planning resulted in fluctuating profits

Like many entrepreneurs, leadership optimistically over-hired in anticipation of new business, then neglected to reduce staff when sales failed to materialize, or client loads fell. In a business dictated by large contracts, these hiring practices created unacceptable fluctuations in costs and profitability.

Mayhill’s Solution:

Based on Mayhill’s assessment of the owner’s urgency to retire, Kevin took the following steps: 

  1. Assessed the likelihood of whether an external buyer could be targeted, and a successful transaction could be closed in a timely manner.
  2. Completed a rigorous assessment of a potential employee led buyer team’s strengths and skill gaps
  3. Held open and honest discussions with both the owner and the employee team in order to assess their willingness, ability, and desire, to sell or become owners.  

The Results:

  1. After ongoing discussions with the team and the owner, Kevin negotiated an arrangement in which Kevin became an employee and co-buyer to fill critical leadership gaps and help build the team disciplines necessary for growth.
  2. Assumed the highly challenging and conflicting role of representing both the owner and the employee team in constructing and negotiating a transaction that would balance the financial and personal needs of all parties.  
  3. Kevin led all due diligence for the buyer group including rigorous vendor, client, and corporate contract reviews, and process documentation.
  4. After attorneys were brought in to protect each party’s interests, a transaction was closed that resulted in strong win-win results. 
    1. Cash at closing
    2. Seller financing with contingent payments based on client revenue retention
    3. An employment contract for the owner post-closing


When I take on a client, business relationships and teamwork improves, financial goals are met, and personal piece of mind follows.

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