Holding Company Restructures - Separating Operating and Asset Companies for Maximum Exit Value

The following example shows a restructuring scenario we’ve observed across multiple client engagements: A manufacturing company owner with approximately $12 million in revenue discovered during due diligence that his real estate (worth roughly $3.2 million) was depressing his company’s valuation multiple. Buyers saw the property as dead capital requiring maintenance, insurance, and property taxes. The dynamic was straightforward: his operating business commanded approximately a 5.5x EBITDA multiple, but buyers applied a blended multiple closer to 4.75x when the real estate was included, effectively valuing the property at cost rather than its income-producing potential. Had he separated that real estate into a holding company three to five years earlier, he potentially could have sold the operating company at the higher multiple while retaining or separately selling a rent-producing asset to a real estate investor. That restructuring would have taken eighteen to twenty-four months and cost approximately $50,000 to $75,000 in professional fees. Instead, the blended multiple discount may have cost him an estimated $600,000 to $900,000 in total transaction proceeds, depending on buyer preferences and market conditions at the time of sale.

Executive Summary

Holding company restructures (separating valuable assets like real estate, intellectual property, and equipment from operating companies) represent a potentially powerful strategy for business owners planning exits within a two-to-seven-year horizon. In our firm’s experience working with lower middle-market businesses over the past decade, we observe that most companies in this segment operate through single entities rather than formal holding company structures. This structural optimization can create three distinct value drivers: tax efficiency through intercompany lease and license arrangements that shift income to lower-tax entities, asset protection by isolating valuable property from operating liability exposure, and transaction flexibility that allows separate disposition of different value components to potentially optimize total proceeds.

The strategic imperative is timing. Holding company restructures typically require advance planning measured in years, not months, particularly for complex asset portfolios. IRS scrutiny of related-party transactions under IRC Section 482 and Treasury Regulation 1.482 demands established history and arm’s-length documentation. While no regulation mandates a specific timeframe, tax advisors generally recommend a minimum three-year operating history under the new structure to satisfy IRS documentation standards and reduce examination risk. Asset protection benefits require separation well before any claims arise, as courts routinely pierce protections created in anticipation of litigation. Buyers may conduct additional due diligence on recently restructured entities, seeking to understand whether changes were motivated by strategic optimization or undisclosed problems.

This article examines the mechanics of holding company structures, identifies separation opportunities across different asset categories and business types, and provides frameworks for analyzing whether restructuring makes sense for your specific situation. We address the common objections (complexity, cost, and operational disruption) while providing realistic timelines and implementation approaches that can enhance exit positioning without creating unnecessary complications. This analysis applies to US-based businesses and reflects market conditions as of late 2024 and early 2025.

Introduction

Most business owners operate with the simplest possible structure: a single entity holding all assets, conducting all operations, and bearing all liabilities. This approach makes sense during the growth phase when simplicity supports agility and when the owner’s focus belongs on building the business rather than optimizing its structure.

But as exit timelines approach, structural simplicity can become a constraint rather than an advantage. A single-entity structure forces binary transactions: you sell everything or nothing. It exposes your most valuable assets to operational risks. It limits your ability to optimize the tax treatment of different asset categories. And it often results in buyers applying their lowest valuation multiple to your entire enterprise, including assets that might command premium treatment in a different structure.

Holding company restructures address these limitations by separating what you own from what you operate. The operating company focuses on generating revenue, serving customers, and employing your workforce. The holding company owns assets (real estate, intellectual property, equipment, or investment portfolios) and leases or licenses them back to the operating company at market rates.

This separation isn’t about complexity for its own sake. It’s about creating optionality that can potentially boost your exit outcomes when properly implemented and aligned with market conditions. You might sell the operating company while retaining income-producing real estate. You might license intellectual property to the buyer while maintaining ownership of the underlying patents. You might sell equipment assets separately to a financing company while transferring the operating business to a strategic acquirer.

But restructuring is not universally beneficial. For some businesses, the costs and complexity outweigh potential gains. For owners prioritizing simplicity and immediate exit, selling without restructuring may be preferable despite potentially lower proceeds. The decision depends on individual risk tolerance, complexity preferences, and buyer type expectations. The challenge is both analytical (determining whether restructuring makes sense for your specific situation) and temporal. Effective restructuring typically requires three to five years of established operations under the new structure to satisfy IRS documentation requirements, demonstrate arm’s-length pricing, and address potential buyer concerns about hidden motivations.

Understanding Holding Company Structures

A holding company structure separates asset ownership from business operations through distinct legal entities with defined relationships. The basic architecture involves a parent entity that owns subsidiary entities, with each subsidiary serving a specific purpose in the overall structure.

The Basic Framework

The most common holding company structure for lower middle-market businesses involves three tiers. At the top sits the owner, typically holding interests through a trust, family limited partnership, or personal ownership depending on estate planning objectives. Below the owner sits the holding company, which owns the valuable assets and the stock or membership interests of the operating company. At the bottom sits the operating company, which conducts business activities, employs workers, and faces customer-related liabilities.

This structure allows the holding company to lease real estate, license intellectual property, or rent equipment to the operating company at fair market value. The operating company pays these amounts as ordinary business expenses, reducing its taxable income. The holding company receives this income (often in a jurisdiction or entity type with favorable tax treatment) creating legitimate tax efficiency without aggressive positioning. But tax benefits vary significantly by state and entity type. Some states don’t recognize intercompany deductions or impose additional compliance requirements, so consultation with tax advisors familiar with your specific state’s treatment is needed.

Entity Selection Considerations

The choice of entity type for each component affects tax treatment, liability protection, and exit flexibility. C corporations provide the cleanest separation and most familiar structure for institutional buyers but create potential double taxation issues. S corporations offer pass-through taxation but impose restrictions on ownership types and number of shareholders. Limited liability companies provide maximum flexibility in structuring intercompany relationships and allocating income but may create complexity for certain buyer types.

We typically recommend LLCs taxed as partnerships for holding companies because they provide pass-through taxation, allow flexible allocation of income among members, and permit various classes of membership interests that support estate planning objectives. Operating companies often work well as S corporations or LLCs depending on specific circumstances including state tax considerations and anticipated exit structures.

Intercompany Agreement Requirements

The IRS scrutinizes related-party transactions closely under IRC Section 482 and Treasury Regulation 1.482, requiring that intercompany arrangements reflect arm’s-length terms: the same terms that would apply between unrelated parties. The regulations specifically authorize the IRS to reallocate income between related entities if arrangements don’t reflect economic reality. This requirement affects lease rates, license fees, management fees, and any other payments between affiliated entities.

Documentation matters enormously. Each intercompany arrangement requires a formal written agreement specifying the terms, payment schedules, and obligations of each party. These agreements should be executed before the arrangement begins, not created retroactively. Payments should follow the agreed schedule precisely, with checks or wire transfers between separate bank accounts.

The arm’s-length standard requires market-rate pricing supported by contemporaneous documentation. For real estate leases, this means obtaining appraisals or broker opinions of rental value. For intellectual property licenses, this might involve comparable license agreements or formal valuation studies following methods outlined in Treasury Regulation 1.482-4. For equipment rentals, published rental rates or dealer quotes provide support. Tax benefits may be reduced by alternative minimum tax implications and the need for ongoing appraisal support to maintain arm’s-length documentation.

The three-to-five-year seasoning period we recommend reflects practical experience with IRS examinations and buyer due diligence patterns. While no specific regulation mandates this timeframe, tax advisors generally agree that shorter operating histories invite scrutiny and skepticism about whether arrangements reflect genuine business purposes or were created primarily for tax avoidance. This recommendation aligns with guidance from major accounting firms and reflects patterns observed in IRS examination selections.

Separation Opportunities by Asset Category

Different asset types present distinct opportunities and challenges for holding company separation. The analysis varies significantly between service businesses and product companies, and between capital-intensive manufacturing operations and asset-light technology firms.

Real Estate Holdings

Real estate represents the most common and often most valuable separation opportunity, particularly for manufacturing, distribution, and healthcare businesses that own their facilities. Many business owners purchase real estate within their operating companies during growth phases when simplicity matters more than optimization. As exit timelines approach, this structure can create several problems.

Buyers evaluating operating companies typically apply lower multiples to real estate value than real estate investors would pay directly. While multiples vary by subsector and market conditions, we have observed situations where a manufacturing business might sell at 5x EBITDA, but the real estate (valued at replacement cost or income capitalization) might be worth more sold separately. Keeping real estate in the operating company forces buyers to pay for an asset they’d rather not own, often at a discounted valuation. But some strategic buyers prefer asset ownership for control, and buyer preferences vary significantly.

Separating real estate into a holding company allows the operating company to lease the property at market rates. The lease payments become deductible expenses for the operating company while providing income to the holding company. Upon exit, you have options: sell the operating company while retaining the real estate as a rental property, sell both entities separately to different buyers, or sell the entire structure to a single buyer who wants both. Note that lease obligations might reduce operating company value in the buyer’s analysis, so the net benefit depends on specific transaction dynamics.

The separation process typically requires a deed transfer from the operating company to the holding company. This triggers potential tax consequences including depreciation recapture under IRC Section 1250 and transfer taxes depending on jurisdiction. Proper structuring (often involving contribution to the holding company in exchange for membership interests rather than sale under IRC Section 721) can minimize these costs, but professional guidance is needed.

Industry variations: Service businesses like professional practices, marketing agencies, and consulting firms typically lease rather than own facilities, limiting real estate separation opportunities. Manufacturing, distribution, healthcare, and hospitality businesses more commonly own significant real estate suitable for separation.

Intellectual Property Portfolios

Intellectual property separation creates opportunities for both tax efficiency and asset protection, though the analysis differs significantly between technology companies with formal patent portfolios and service businesses whose intellectual property consists primarily of trade secrets and know-how.

For technology and product companies, patents, trademarks, copyrights, and trade secrets represent intangible assets that can be licensed rather than leased, with license fees replacing rent payments. The tax efficiency opportunity arises because intellectual property can be owned by entities in favorable jurisdictions. While aggressive offshore structures face IRS challenge under Subpart F and GILTI provisions, legitimate domestic arrangements (such as holding companies in states without income tax on royalty income) can create meaningful benefits in some situations.

Asset protection represents another significant consideration for any business with valuable IP. Operating companies face litigation risk from customers, competitors, and various third parties. If intellectual property remains in the operating company, an adverse judgment could reach these assets. Separating IP into a holding company with no operating liabilities protects these valuable assets from operating risks.

Industry variations: Technology companies with formal patent portfolios benefit most from IP separation. Professional services firms may have limited separable IP beyond trade names. Manufacturing companies with proprietary processes occupy a middle ground: the IP exists but may be difficult to value and license at arm’s-length rates without formal registration.

The separation process for intellectual property requires formal assignment agreements transferring ownership from the operating company to the holding company, followed by license agreements granting the operating company rights to use the IP in its business. Valuation of intellectual property for transfer purposes requires professional appraisal following IRS-accepted methodologies, particularly for patents and proprietary technology.

Equipment and Vehicle Fleets

Equipment-intensive businesses (construction, transportation, manufacturing, healthcare) often benefit from separating major equipment into holding companies that lease assets back to operations. Service businesses and technology companies with minimal equipment rarely find this strategy worthwhile.

Lenders often prefer lending against equipment held in single-purpose entities without operating liabilities. Equipment financing in a holding company structure may provide better terms than equipment financing in an operating company with various business risks. This separation can improve overall capital costs while maintaining operational control, though actual terms depend on lender relationships and credit conditions.

For exit purposes, equipment separation allows different disposition strategies. A strategic buyer might want the operating business and customer relationships but prefer to lease rather than purchase equipment. A financial buyer might see equipment ownership as a financing opportunity. Separation creates optionality that a combined structure cannot provide.

Investment Portfolios and Excess Cash

Operating companies that accumulate significant cash or investment portfolios create tax inefficiency and asset protection exposure. These assets generate investment income taxed at ordinary rates within the operating company while facing exposure to operating liabilities.

Moving excess capital to a holding company (through dividends, distributions, or intercompany loans) protects these assets from operating claims while potentially improving tax treatment. The holding company can invest in assets appropriate for the owner’s risk tolerance without exposing those investments to business risks.

This separation requires careful attention to cash flow needs, working capital requirements, and the formalities of intercompany transactions. Distributions must respect corporate formalities, and any loans between entities require proper documentation with arm’s-length interest rates based on applicable federal rates published monthly by the IRS.

Framework for Restructuring Analysis

Not every business benefits from holding company restructures. The analysis requires weighing potential benefits against costs, complexity, and implementation requirements. For some businesses, the answer is clearly no.

When NOT to Restructure

Before analyzing potential benefits, consider whether restructuring makes sense at all. We generally advise against restructuring in the following situations:

Insufficient time before exit. If your exit timeline is less than three years, restructuring likely won’t provide sufficient seasoning to achieve full benefits. The costs and disruption may not be justified.

Minimal separable assets. Businesses with less than $500,000 in separable assets (real estate, equipment, or formal intellectual property) rarely generate enough benefit to justify restructuring costs.

Simple business models with low liability exposure. Service businesses with few employees, no product liability exposure, and leased facilities may find little value in the complexity of multiple entities.

Existing complex structures. If your business already operates through multiple entities for historical reasons, adding a holding company layer may create more confusion than value.

Owner’s inability to maintain formalities. Holding company structures require discipline in maintaining separate bank accounts, formal intercompany agreements, and consistent payment practices. Owners who struggle with corporate formalities should not add more entities.

Strategic buyer target. If you’re likely selling to a strategic buyer who prefers simple structures, restructuring may create friction that outweighs benefits. Some buyers will discount complex structures or require unwinding before closing.

Benefit Assessment

For businesses that pass the initial screen, quantifying restructuring benefits requires examining three categories: tax efficiency, asset protection, and exit flexibility.

Tax efficiency benefits derive from intercompany payments that shift income between entities. Calculate the potential annual tax savings from lease or license arrangements by multiplying the fair market payment by the marginal tax rate differential between entities. Project these savings over the expected holding period to determine aggregate benefit. Note that actual savings depend on state conformity, entity type, and individual circumstances, these calculations provide directional guidance rather than precise predictions.

Asset protection value is harder to quantify but no less real. Consider the probability of operating claims against assets held in the operating company and the potential magnitude of such claims. Businesses with significant litigation exposure (product liability, professional malpractice, environmental risks) benefit more from asset protection than lower-risk operations.

Exit flexibility value depends on the composition of your assets and the likely buyer universe. If your real estate represents 30% of total value and real estate investors would pay more than strategic buyers, separation can create meaningful optionality. If your intellectual property might be licensed to multiple users rather than sold outright, separation enables that strategy. But buyer preferences vary: some buyers value simplicity over structural optimization.

Cost-Benefit Analysis: A Worked Example

Consider a manufacturing business with $8 million in revenue, $1.2 million in EBITDA, and the following separable assets:

• Real estate: $2.4 million (fair market rent: $180,000/year)
• Equipment: $800,000 (fair market rent: $96,000/year)

Upfront costs:

• Legal fees for entity formation and agreements: $35,000
• Valuation and appraisal fees: $12,000
• Accounting setup and first-year returns: $8,000
• Transfer taxes (1.5% of real estate): $36,000
• Total upfront: $91,000

Annual ongoing costs:

• Additional tax return preparation: $4,500
• Entity maintenance and registered agents: $1,500
• Additional bookkeeping time: $2,400
• Total annual: $8,400

Owner time investment (often overlooked):

• Implementation phase: 40-80 hours × estimated $300/hour opportunity cost = $12,000-$24,000
• Ongoing annual management: 10-15 hours × $300 × 5 years = $15,000-$22,500

Annual benefits (assuming 5% tax rate differential):

• Tax savings on $276,000 intercompany payments: $13,800

Five-year net present value analysis (8% discount rate):

• Present value of tax savings: $55,100
• Less: Upfront costs: ($91,000)
• Less: Present value of ongoing costs: ($33,500)
• Less: Owner time (midpoint estimate): ($30,000)
• Net present value of tax benefits alone: approximately ($99,400)

In this example, tax benefits alone don’t justify restructuring over a five-year period. But the analysis changes significantly if:

• The owner plans to retain the real estate post-exit (avoiding the blended multiple discount worth potentially $150,000-$300,000 depending on buyer preferences and market conditions)
• The business faces material litigation exposure (protecting $3.2 million in assets)
• The equipment can be financed separately at better rates (potential $15,000-$25,000 annual savings)

Key insight: Tax efficiency alone rarely justifies restructuring for lower middle-market businesses. The compelling case typically requires exit flexibility benefits or significant asset protection considerations.

Decision Framework

We recommend restructuring analysis when any of the following conditions apply (thresholds calibrated for businesses with $2M-$20M in revenue):

If multiple conditions apply, the case for restructuring strengthens considerably. The cumulative benefits often justify costs that might seem disproportionate for any single benefit category.

Implementation Timeline and Approach

Successful restructuring requires methodical implementation over an extended timeline. Rushing the process creates compliance risks and undermines the benefits you’re trying to achieve. Implementation also presents practical challenges that extend beyond legal and tax matters.

Phase One: Analysis and Design (Months 1-3)

Begin with a comprehensive asset inventory and valuation. Identify all assets potentially suitable for separation, obtain current valuations, and project future values. Engage legal and tax advisors to design the optimal structure considering your specific circumstances, state tax implications, and exit objectives.

During this phase, evaluate entity types for each component, design intercompany relationships, and draft preliminary agreements. Address any existing debt or liens that might complicate asset transfers. Critical early step: determine whether existing lenders must consent to asset transfers and begin those conversations early.

Professional fee range for this phase: $15,000-$40,000 depending on complexity. These estimates reflect our firm’s experience and surveys of M&A advisory firms serving the lower middle market; actual fees vary by region, firm, and complexity.

Phase Two: Entity Formation and Documentation (Months 3-6)

Form the necessary entities, obtaining employer identification numbers and establishing corporate formalities. Open bank accounts for each entity and establish bookkeeping systems that properly track intercompany transactions.

Draft and execute all intercompany agreements including leases, licenses, and management agreements. Obtain supporting documentation for arm’s-length pricing including appraisals, market studies, and comparable transaction analysis.

Common implementation challenges:

• Accounting software may need reconfiguration to handle intercompany transactions
• Existing lenders may need to consent to asset transfers or restructure security interests
• Insurance policies require updating to reflect new ownership
• Employees may have questions about new entity names on paychecks or W-2s
• Existing advisors unfamiliar with holding company structures may resist changes

Professional fee range for this phase: $10,000-$35,000 depending on number of entities and complexity.

Phase Three: Asset Transfer (Months 6-12)

Execute the actual transfer of assets from operating company to holding company. For real estate, this involves deeds, title insurance, and recording. For intellectual property, this requires assignment documents and potentially patent and trademark office filings. For equipment, this involves bills of sale and UCC filings if applicable.

Address any tax consequences of transfers, which may require advance planning or careful structuring to minimize costs. Update insurance policies to reflect new ownership arrangements.

Common challenges:

• Title issues discovered during real estate transfer
• State-specific transfer tax complications
• Lender consent delays

Phase Four: Operational Integration (Months 12-36)

Operate the restructured entities with strict attention to corporate formalities. Make all intercompany payments on schedule, maintaining clear documentation of each transaction. File separate tax returns for each entity, properly reporting intercompany transactions.

This seasoning period establishes the structure’s legitimacy for both tax purposes and buyer due diligence. Any shortcuts during this phase undermine the value of the entire restructuring effort. The consistency of operations during this period provides the documentation trail that supports arm’s-length treatment under IRS examination.

Total professional fees (excluding transfer taxes and owner time): Based on our experience and industry surveys, comprehensive restructuring for lower middle-market businesses typically ranges from $40,000 to $120,000 depending on:

• Number of entities created
• Complexity of asset transfers
• Number of state jurisdictions involved
• Whether formal valuations are required
• Ongoing advisory needs during seasoning period

Timeline note: These timelines assume cooperative lenders, clean title, and no unusual complications. Complex situations involving multiple lenders, title problems, or multi-state operations may require 24-36 months for full implementation.

Cases Where Restructuring Added Limited Value

Not every restructuring delivers the anticipated benefits. Understanding failure modes helps calibrate expectations. While restructuring outcomes vary, these examples show common pitfalls.

The service business with minimal assets. A $6 million consulting firm restructured primarily for asset protection, separating modest furniture and equipment into a holding company. Total restructuring cost: $45,000. Annual intercompany payments: $18,000. Tax savings: negligible. When the firm sold three years later, the structure provided no meaningful exit benefit—the buyer simply acquired both entities. The owner concluded the complexity wasn’t worth the modest asset protection gained.

The rushed restructuring. A manufacturing owner learned of a potential acquisition opportunity and rapidly restructured eighteen months before a potential exit. The buyer’s due diligence team questioned the timing extensively, ultimately requiring representations and warranties specifically addressing the restructuring motivation. The compressed timeline meant market-rate documentation was thin. While the deal closed, the owner felt the rushed restructuring created more friction than value.

The over-engineered structure. An owner with $4 million in combined real estate and equipment created four separate holding entities (one for each property and equipment category) on advisor recommendation. The administrative burden proved excessive, with twelve separate tax returns annually and constant intercompany accounting reconciliation. The owner eventually simplified to a single holding company, having wasted approximately $30,000 in unnecessary complexity.

The strategic buyer mismatch. A distribution company owner restructured expecting a financial buyer who would appreciate the separation. Instead, the most attractive offer came from a strategic competitor who preferred simple structures and required the holding company to be unwound before closing. The unwinding process added three months and $25,000 in fees to the transaction timeline.

Common Failure Modes

Implementation errors creating IRS challenges. Inadequate documentation, below-market pricing, or missed payment formalities can trigger IRS reallocation of income between entities. Probability increases with complexity; mitigation requires experienced advisors and conservative pricing.

Buyer resistance to structure complexity. Sophisticated buyers often prefer simple structures and may discount complex arrangements or require unwinding. Probability: significant depending on buyer type. Mitigation: clear documentation and willingness to simplify if necessary.

Ongoing compliance lapses undermining benefits. Owner fatigue with formalities or staff turnover can lead to documentation gaps that compromise asset protection and invite IRS scrutiny. Mitigation: embedded processes and regular compliance reviews.

Actionable Takeaways

Conduct an asset separation audit. List all assets currently held in your operating company, including real estate, intellectual property, equipment, and investments. Estimate the value of each category and identify which assets might benefit from holding company separation. Focus on assets exceeding $500,000 in value for businesses in the $2-20 million revenue range.

Calculate the full cost-benefit picture. Don’t rely on tax savings alone—they rarely justify restructuring for lower middle-market businesses. Model the exit flexibility value by comparing blended multiples versus separated asset sales, recognizing that actual outcomes depend on buyer preferences and market conditions. Quantify asset protection value based on your specific liability exposure. Include owner time investment of 40-80 hours during implementation and 10-15 hours annually for ongoing management.

Assess your liability exposure honestly. Identify the operating risks that could generate claims against your assets: product liability, professional malpractice, employment disputes, environmental issues. Higher-risk operations benefit more from asset protection through separation. Low-risk service businesses may find limited value.

Evaluate your exit timeline critically. Holding company restructures typically require three to five years of seasoning to achieve full benefits and satisfy IRS documentation standards under related-party transaction rules. If your exit timeline is shorter, restructuring may not be practical. If longer, you have time for thoughtful implementation.

Consider your capacity for complexity. Multiple entities require discipline: separate bank accounts, formal agreements, consistent intercompany payments, additional tax returns. Honestly assess whether you and your team will maintain these formalities consistently. Restructuring failures often stem from compliance lapses rather than structural problems.

Assess your likely buyer type. Strategic buyers often prefer simple structures; financial buyers may appreciate separation. Consider whether restructuring aligns with your most likely exit path, and be prepared to simplify if buyer preferences dictate.

Engage qualified advisors. Restructuring involves legal, tax, and valuation complexities that require professional guidance. Interview advisors with specific experience in holding company structures for businesses of your size and type. Request references from similar completed restructurings.

Conclusion

Holding company restructures represent sophisticated structural optimization that can create meaningful value for business owners willing to plan years in advance of their exits. The separation of operating activities from asset ownership can generate tax efficiency, improve asset protection, and create transaction flexibility that simplified structures cannot match.

But restructuring is not universally beneficial. Service businesses with minimal tangible assets, owners too close to exit, businesses without significant liability exposure, and those likely selling to strategic buyers who prefer simplicity may find that costs and complexity outweigh potential benefits. The decision requires honest analysis of your specific circumstances, not assumption that restructuring automatically creates value.

The critical insight is timing. These structures typically require months to implement properly and years to season sufficiently for full benefit. An owner five years from exit has ample time for thoughtful restructuring and benefit realization. An owner two years from exit has likely missed the optimal window.

For businesses with significant real estate, intellectual property, or equipment assets and adequate time horizons, the benefits can justify the investment. That manufacturing owner whose example opened this article would have gladly paid $50,000 to $75,000 for restructuring had he started early enough and confirmed his buyer universe would value the structure.

We encourage every owner with an exit timeline of three years or more and material separable assets to conduct the cost-benefit analysis. You may conclude that restructuring isn’t appropriate for your specific situation, and that conclusion may be correct. But you should make that determination through rigorous analysis rather than by default. The owners who achieve optimal exit outcomes are those who understand their options and act deliberately while time permits.