Page 14 - GBC summer English 2025

•  Connection – In most cases, post-
exit, there is still a strong connec-
tion to the business and the ability
to gradually transition from
owner/manager to a potential
advisor to the business.
•
 Cash Flow Considerations –
Through the use of an estate
freeze, and the subsequent lever-
aging of the business’ valuation
and annual cash flows to secure
debt financing, a ‘partial’ transfer
of funds can occur under a family
succession plan.
CONS:
•  Cash Flow Considerations – Al-
though the use of an estate freeze
can prove a valuable option, often
in these transitions, there is not an
immediate ‘full’ transfer of funds
from the new ownership to
protect the business post transition.
•
 Longer Exit Timeline – Given
the unique structuring of these
transactions, this approach will
often lead to longer exits than
with a third-party buyer.
2. Third-Party Management –
Transferring operations to a third-
party management company while
retaining ownership.
PROS:
•  Legacy – Ownership and over-
arching control of the asset remains
in the family as the third-party
management company controls
day-to-day operations, often for an
agreement term of 3 – 5 years.
•  Connection – Given that owner-
ship of your business is retained,
connection to the business is
strong despite limited involve-
ment in day-to-day operations.
CONS:
•  Cash Flow Considerations –
Third-party management companies
often do not provide any upfront
funds for the management of a
business; they are simply brought
14
Golf Business Canada
Consideration:
Executive
Training &
Development
Often, the transition from
management to ownership
can be a significant step,
requiring a different set
of skills that may not
be currently developed.
Consider enrolling future
business leaders in
an executive training
program(s) before, during,
and for a period after the
transition. This can help
new leaders develop
the requisite skillset to
ensure the success of the
individual and the business
following the transition.
in to take over operations for a
fee payment, often calculated as a
percentage of revenue.
•  Delayed Exit Timeline – Enter-
ing into an agreement with a
third-party management company
often extends the exit timeline
although transitioning the busi-
ness following a period of third-
party management could be
quite seamless if the new owner
(family or third-party) retains the
management company.
Note: Third-party management can be
connected to a potential family
succession plan if the desire and/or
skillset required to run day-to-day
operations of the business do not exist,
but the long-term vision is still for the
business to remain within the family.
3. Management Buyout – The busi-
ness (or part of the business) is
transitioned to a management
figure(s) who is interested in owning
the asset.
PROS:
•  Connection – Similar to family
succession, there is typically a
continued connection with the
business as it is transitioned to a
trusted member of management,
one who has often been em-
ployed by the family for several
years.
•  Consistent Management – Given
the transition to individuals who
have been employed by the busi-
ness, business operations typi-
cally see less disruption given the
expertise and knowledge base of
the new ownership.
CONS:
•  Cash Flow Considerations – As
mentioned within previous suc-
cession options, the new owner-
ship may not have the capital re-
quired for an upfront purchase of
the asset.
•  Longer Exit Timeline – Once
again, given the cash flow con-
siderations, a longer buyout
timeline may be established to
protect the business and new
ownership.
4. Third-Party Buyer –– The business
is sold to new ownership that is not
previously connected to the
owner(s) or the business. Notably,
this option includes multiple types
of buyers, whether it be an estab-
lished operator of golf courses,
private equity, or a family office
that may bring in new manage-
ment, a group of members, or other
interested parties. Each of these
potential buyers bring unique
circumstances and considerations
to maximize value and vision upon
exit. In general, the pros and cons
of selling to a third-party buyer are: