For owner-operated GovCon service contractors. Understand where key-person dependence, contract concentration, taxes, business value, and your personal financial future intersect.
You’ve built, or are building, a valuable government-contracting business.
As the company grows, so can the consequences of losing a critical person or depending too heavily on a major contract.
And what worked when the business was smaller may no longer fit the company you own today.
Are you paying more in taxes than you need to?
Of what you keep, how much is actually diversified, versus still tied up in the business itself?
And is that growth creating something transferable, or making the business more dependent on you?
Many advisors stop at the basics. We start there, and go further when the situation calls for it.
Some of that we can address directly.
Some of that we can address directly. Where specialized expertise is needed, we bring in the right specialist for valuation, business acceleration, legal, or tax work
Either way, the objective is the same:
Make sure the right capability gets brought forward when the situation actually calls for it.
Not every owner needs broader capabilities.
Not every strategy fits every situation
Conventional planning is the foundation.
Beyond Conventional is where we look when the foundation alone does not fully address what’s actually needed.
The core planning tools that provide the foundation for many financial plans
Standard brokerage and managed investment accounts
Life, disability, and long-term care coverage
Annuities
Standard employee and executive benefits
Retirement-plan design, including 401(k), profit-sharing,
cash balance, and defined benefit plans when appropriate
Estate planning coordination
Key-person and business-continuity planning
Buy-sell agreements that are properly funded and kept up to date
A broader toolkit of investments, structures, and resources that may also be appropriate depending on the situation
Executive-benefit and retention strategies beyond standard plans
Alternative and non-traded investments
Tax-mitigation and tax-advantaged strategies
Real-estate and transaction strategies
Business-owner planning and structures
Bank-financed insurance strategies for tax-advantaged accumulation and wealth transfer
Valuation, value acceleration, and exit/transition planning
Investment-banking, capital-raising, and other professional resources
Other strategies and resources appropriate to the situation
01
KEY
EMPLOYEE
A GovCon owner may first call because of a key employee.
But while looking at the retention issue, another question becomes obvious:
If something happened to the owner, is the buy-sell agreement updated and funded correctly?
If something happened to the key employee or owner due to illness or injury, would it have significant impact on the business?
02
TAXES
The conversation may begin with paying too much in taxes
Is too much of the owner’s net worth tied to the company?
03
MAJOR CONTRACT
The concern is a major contract.
If the business lost value, what happens to the owner’s retirement plan?
This is why we don’t begin with assumptions and solutions.
The presenting problem is often only the first layer.
What If One Key Person
Walked Out the Door?
What it looks like: One or two people whose departure would hurt far more than their job title suggests.
Why it matters: The real question isn’t just how to keep them, it’s what losing them would cost.
In the diagnostic: What makes this person critical, and where the real exposure sits
What it looks like: A dozen contracts that mostly trace back to the same agency, prime, or program.
Why it matters: Concentration affects what the company is worth and how dependent your future is on one outcome.
In the diagnostic: What would actually change if that relationship went away.
Is Too Much of Your Wealth
Depending on the Company?
What it looks like: Your company may be your biggest asset, income, and retirement plan, all at once.
Why it matters: It’s worth knowing whether that concentration is intentional.
In the diagnostic: How much wealth exists outside the business.
What it looks like: An agreement that’s sat untouched for years while the business changed around it.
Why it matters: The worst time to discover a gap is after the triggering event.
In the diagnostic: Whether the agreement, valuation, and funding still work together.
What it looks like: Good profits and a big tax bill, but that doesn’t mean enough is becoming personal wealth.
Why it matters: Money lost to unnecessary taxes also loses its chance to compound for your future.
In the diagnostic: Whether your current tax strategies are actually the most effective ones available.
What it looks like: The business is growing, but you may not know which parts of its value are durable.
Why it matters: A stronger business now gives you more options, whether that’s growing, recapitalizing, or selling.
In the diagnostic: What’s increasing or limiting the company’s transferable value.
If one of these situations sounds familiar, we can start there.
IT Service firm
Approximately 70 FTES
One contract = Roughly 60% of Revenue
Potential cash-flow and staffing disruption
Two critical PMs may leave during the uncertainty
Clarify revenue concentration, Contract terms, and transition risks.
Weigh retention options for the people who would be hard to replace.
Review working capital and build liquidity outside the company so the plan doesn’t depend on the award.
Coordinate timing with the owner’s CPA and attorney so the plan holds up either way.
A retention option for the critical people, more liquidity outside the company, and a plan that holds up whether the award is won or lost.
Why it matters: A retention option for the critical people, more liquidity outside the company, and a plan that holds up whether the award is won or lost.
Hypothetical scenario provided for illustrative purposes only. Actual planning considerations and outcomes will vary.
-Profitable owner-led GovCon service company.
-Income and business value have grown.
-No immediate plan to sell.
-Taxes have grown along with income.
-Most net worth is concentrated in the business, and much outside wealth sits in conventional retirement accounts.
Clarify what the company is worth and what is driving that value
See how much depends on the owner, a few key people, particular contracts, or past performance.
Review how much liquidity and personal wealth exists outside the company, and how effectively it is being built.
Decide what the owner wants five or ten years from now.
A clearer picture of how durable the company’s value is, how much wealth exists outside it, and which choices are available.
Why it matters: The question is not which investment to buy, but whether the company’s success is building wealth and flexibility outside it.
Hypothetical scenario provided for illustrative purposes only. Actual planning considerations and outcomes will vary.
We are not trying to solve everything in twenty minutes.
And we are not starting with any recommendations.
The first conversation is about understanding the situation well enough to decide whether there is actually something worth pursuing.
We want to understand:
What is happening
Why it matters now
What you already have in place
What you have already tried
What still feels unresolved
What would have to be true for the issue to be worth addressing
Sometimes that leads to a clear next question.
Sometimes it shows that more information or another professional is needed.
The first conversation is not about finding a solution. It is about deciding whether there is a real problem worth solving.
Clarity
on your biggest exposure points, who you can’t afford to lose, how much is riding on the same few relationships, and whether you may be paying more in taxes than you need to.
Recap
of what we discussed, so we’re both working from the same understanding
A Next Step
A next step, if one’s warranted
No. There is no reason to discuss any specific product or strategy until we understand whether there is a problem worth solving and what might actually fit.
That is completely fine. A good advisor may already be doing important work for you, and there is no reason to disrupt a relationship that is working.
Sometimes the issue is simply that a particular business-owner issue or capability falls outside what is currently being addressed. If that happens, we can work alongside your existing advisor and other professionals rather than replacing them.
No. Many of these issues cross financial, tax, legal, business, insurance, valuation, and other disciplines. When useful, and with your permission, we can coordinate with the professionals you already have or bring in specialized expertise where needed.
Then that is a perfectly acceptable conclusion. The purpose is not to manufacture a problem.
No.
In fact, many of these issues are more useful to address years before an owner is considering a transaction.
Building value, reducing key-person dependence, improving ownership continuity, and creating more personal wealth outside the company can make sense whether you eventually sell or never sell.
No. Start with the situation. If deeper analysis makes sense, we can determine what information is actually needed afterward.
There is no charge for the initial conversation. Its purpose is to understand the situation well enough to decide whether there is actually something worth pursuing.
Compensation is generally through various commissions or fees associated with the work and solutions provided, that is how I’m compensated. In some cases, the work may also involve outside specialists or professionals with their own separate fees. The first conversation itself is never contingent on buying anything.
No. Those are legal, regulatory, or compliance matters and should be handled by the appropriate GovCon attorney or specialist. Our role is to understand how those issues may affect the financial, ownership, valuation, continuity, or planning decisions around the business, and coordinate with the right professionals when needed.
Yes, in many cases. When payroll or operating costs need to be covered while waiting on government payment, that’s usually addressed through invoice factoring or accounts receivable financing, and we can help connect you with the right source. Sometimes that’s through our own investment-banking and financing arm. Sometimes it’s through banking and lending relationships we work with directly. Availability, terms, qualification, and fees depend on the lender and the specific circumstances. Which makes the most sense depends on the specific situation, and it’s exactly the kind of thing worth raising in the first conversation.