A Seller's guide to the Ojenta process — and how it compares to the path you've probably already considered.
You didn't spend nearly thirty years building this business to hand it over to a stranger for less than it's worth — and then spend a decade hoping the new owner doesn't drive it into the ground.
Meet Henry. He has spent twenty-eight years building a highly successful HVAC company in central North Carolina. Eight service trucks on the road. Seven technicians and a service manager named Sarah who keeps the schedules straight. A customer base of 1,150 residential clients on maintenance contracts generating $1.15 million in recurring annual revenue — roughly 60 percent of total sales — with a renewal rate above 90 percent. The rest of the business runs about 48 percent residential repair and replacement and 15 percent light commercial, with established relationships at every major property management firm in the county.
Henry runs trucks himself three days a week. His best commercial client relationships live in his phone, not in any CRM. There are no written SOPs. Maintenance contracts renew on paper billing, not automatic charge. The business generates $1.9 million in annual revenue and $390,000 in Seller's Discretionary Earnings.
Henry is also tired. Tired of the phone ringing at 2:00 AM on a humid July night. Tired of being the person every problem flows through. He wants to sell the business and enjoy his retirement — without spending another decade as the only person who can keep the company running.
If Henry walks into an M&A or brokerage firm in North Carolina, he will be walked through a specific, well-worn process. This document tells Henry exactly what that process looks like — and exactly where the Ojenta path diverges, and why.
Henry began with an unrealistic idea of what his business is worth. He reports $220,000 in annual net profit — but he knows that number understates what the business actually generates. His own salary, the truck he uses personally, family health insurance, and a handful of other owner benefits all run through the books. Add those back and the business generates $390,000 a year in real cash flow available to a buyer. Henry is right about that math. Business brokers call it Seller's Discretionary Earnings (SDE), and it is the number the market actually uses.
| Line-item net profit | $220,000 |
| Henry's salary (add-back) | +$110,000 |
| Truck #7 — personal use | +$15,000 |
| Family health insurance | +$16,000 |
| Cell phones + personal subscriptions | +$6,000 |
| Non-recurring HVAC equipment expense | +$23,000 |
| True SDE (cash flow available to a buyer) | $390,000 |
In Henry's mind, a business that generates $390,000 every year should be worth seven or eight times that — somewhere between $2.7 million and $3.1 million. He has heard variations of that number from friends who sold, from articles, from the back-of-the-envelope logic of what a buyer ought to pay for a proven cash machine. He is not being unreasonable.
He is just wrong. Henry is in for a shock.
A business is worth what it earns, at a multiple that reflects how safely those earnings will survive the sale. For an HVAC contractor like Henry's, an appraisal at about three times SDE is reasonable: $1,170,000. Call that the Business Value. The business also carries about $225,000 of working capital — receivables and inventory, less what it owes suppliers — that a buyer takes over with it. The question is how much of all that Henry can actually collect.
A buyer who has never met Henry is buying a business whose best relationships live in Henry's phone. They price in the risk that those relationships walk out the door with him. Advisors put that discount at 15 to 25 percent for a business with moderate owner dependency; at 20 percent, Henry's realistic price is $936,000, plus $225,000 for the working capital — $1,161,000.
The discount is not a negotiating tactic. It is an honest assessment of the risk the buyer is taking on — and the one thing a broker cannot fix, because Henry's role in the business cannot be unwound in the sixty to ninety days between a letter of intent and closing.
Ojenta pays the full Business Value — $1,170,000, with no discount — plus the same $225,000 for the working capital: $1,395,000. That is not generosity. It is because the Ojenta path removes the risk the discount exists to price: a screened successor, Patrick, runs the business from day one, with a Mentor beside him and Henry introducing him to every customer that matters, for as long as the handoff takes.
Under Seller Financing, a new company formed for this deal — the New Company, owned by an Ojenta subsidiary and Patrick — buys the business's assets from Henry's company for the full $1,395,000.
A typical brokered sale pays most of the $1,161,000 in cash at closing, with the rest in a short seller note and an earnout. The broker's commission — about $116,100 — and other closing costs come off the top. Henry walks away from the closing table with about $792,000.
In all, the sale pays Henry about $1,102,000 before tax. After capital gains tax, North Carolina income tax and depreciation recapture on eight service trucks, he keeps about $950,000.
If the buyer finances with an SBA loan, it can be worse. Under the SBA's June 2025 rules, a seller note used toward the buyer's down payment must sit on full standby for the life of the loan — typically ten years — paying Henry nothing, unsecured, and behind the bank's first lien on every asset.
Henry is paid two ways.
As a lender. The New Company pays for the assets with one installment note for $1,395,000 at 9% interest, signed at closing; the first year is interest only. The note is the New Company's debt — a fixed obligation, not a projection. It is paid from the New Company's share of the profits, so Henry never helps pay for his own sale. And it is secured from the day it is signed by a first lien on everything the New Company bought. The note is scheduled over ten years; on these numbers it is paid off early, in Year 9, because profits that Patrick has not yet earned go toward paying it down. In all, it pays Henry about $2.04 million — the $1,395,000 of principal plus about $647,000 of interest.
Through a royalty. The New Company also pays Henry a royalty for the use of the business's name: usually around 12% of every dollar of profit growth above the year of the sale, for as long as the business runs, which can be decades. The royalty is a projection — it depends on how much the business grows — and it continues after the note is paid: about $5,600 in Year 1, about $69,000 in Year 10, and about $127,000 in Year 16 on Henry's numbers.
There is no cash at closing; Henry pays about $32,500 of his own closing costs. But in the first year alone he receives about $225,000. Because he is paid over time, the gain on the sale is taxed as the note is paid — not all in the year he sells. Only the depreciation recapture on the equipment is taxed up front.
The broker deal puts more cash in Henry's hands on day one — about $792,000. If Henry needs a lump sum at closing, that matters, and the broker deal is the better fit.
Over time the picture reverses. By Year 5, Henry has kept more after tax through Ojenta than the broker deal ever pays him. Over sixteen years he receives about $3.02 million before tax and about $2.55 million after tax and closing costs — and the royalty keeps paying for as long as the business runs.
There are three, and Henry should weigh each one.
Time. In the first months after closing, Henry needs to show up — close to full time at first, tapering quickly as Patrick takes hold. Not to run the business; that is Patrick's job from day one. Henry is there to hand over what no contract can describe: the client who has called Henry's cell for fourteen years, the supplier who gives Henry good terms because of a handshake in 2009, the technician who works hard because Henry remembers his kid's name. Those relationships are the asset, and they transfer only by introduction from the person who built them.
Patience. There is no lump sum. Henry is paid through a note and a royalty, over years.
Trust in the structure. After closing, Henry is a lender and is paid a royalty for his business's name. He does not run the business, and he does not judge Patrick's progress — an independent Mentor and Ojenta do. What protects Henry is the note, the lien behind it, and the rules agreed before he signs, not his ability to step back in.
For some sellers, that is not the right trade. Twenty-eight years is long enough, and they would rather take the wire transfer, sign the non-compete and be finished. That is a legitimate choice, and the broker deal is the right answer for them.
But Henry's business was never only about the money. It was about the customers who trusted him, the employees who built careers around his name, and a standard of work he spent twenty-eight years defending. For Henry, a few months of hard handoff is the last chapter of something he cares about — and the best chance that what he built survives in a form he would recognize.
The broker writes an anonymous profile of the business and markets it to buyers who sign an NDA and prove they can pay: local competitors, roll-up platforms, search-fund operators. Henry has little say in who buys. He usually cannot turn down a qualified buyer because he doubts they will look after his employees or his customers.
Henry does not find a buyer. He chooses a successor.
Ojenta screens Protege candidates not only for the skill to run a business but for the qualities that decide whether a handoff works: diligence, coachability, and the character to carry what Henry built with care. Henry meets the candidates and has a real say in who is chosen.
In this example the successor is Patrick. He brings no down payment personally. He brings the trade — years in the field as an HVAC technician, with the required trade licenses — and experience leading a crew, quoting jobs and managing a business, which is what Ojenta screened him for. He commits five years of his working life to earning the business, owning none of it in the first year, and he answers personally for any losses he causes through misconduct. Patrick is paid a fixed fee for running it, and earns equity over time. The 1,150 maintenance customers who renew because they trust Henry's name are far more likely to stay with someone Henry has introduced in person than with a buyer he met twice before closing.
After the letter of intent, sixty to ninety days of due diligence: the buyer's accountants check every deposit against bank statements and tax transcripts, confirm the titles on all eight trucks, and make sure the state HVAC licensing can carry over. At closing Henry signs the purchase agreement, receives his wire transfer, and owes a few months of transition help.
The due diligence is much the same. The documents are more involved, and that is deliberate — they are where Henry's protection lives:
Ojenta forms the New Company from its own standard documents, which speeds things up. Henry needs his own lawyer, and Patrick should have one separate from Ojenta's. That is how each of them is protected.
Henry has three to six months to compress twenty-eight years of knowledge into a handful of introductions. Whether it takes — whether Sarah stays, whether the commercial clients renew, whether the technicians follow new leadership — becomes clear over the following year. By then Henry has been paid most of the price and the buyer is on their own; he hears how it went from a distance.
Henry's handoff is a defined commitment in the purchase agreement, sized to what this business needs: intense at first — client introductions, supplier relationships, the judgment calls no manual captures — and tapering fast. After that, Henry stays reachable for the rare question only he can answer. The Mentor coaches Patrick on general business judgment — cash, people, pricing, discipline. The Mentor is not an HVAC expert; that knowledge is exactly what Henry's handoff exists to pass on.
Patrick earns his ownership over time, as he meets milestones agreed before closing and as Henry's note is paid. As the lender, Henry receives regular financial information about the business.
Henry has taken his wire transfer and signed a non-compete. If the buyer struggles, he has no say, and the non-compete keeps him from stepping back in to steady his customers or his employees. If he also carried a seller note, as an SBA-financed buyer often requires, that note waits behind the bank's first lien on every asset.
A struggling Protege is a governed event, not a catastrophe. The yearly criteria surface trouble early: if Patrick misses a step, the Mentor sets out the specific shortfalls he has to fix, and the next step waits. If he cannot fix them, the Mentor and Ojenta can replace him, and Ojenta finds and screens a successor. Until one is in place, the business is run by Henry and the Mentor or by a recruited interim operator — never by Ojenta.
Through all of it, Henry's note does not change. It remains the New Company's debt, secured by a first lien on everything the New Company bought, and his royalty continues. A departing Protege keeps only what he has actually paid for; the rest goes to his successor. And there is no SBA loan draining the business's cash while it recovers.
Henry keeps about $950,000 after tax, steps away after a short handoff, and watches from a distance. He has no say and little visibility. Whether the maintenance customers stay loyal to a new name on the trucks is something he will read about, not influence.
After the first months of handoff, Henry's retirement is real. The note pays him about $217,000 a year on its schedule, plus early paydowns, until it is paid off in Year 9. His royalty keeps paying after that, and is projected to grow with the business: about $61,000 in Year 9, about $127,000 in Year 16.
If the business is ever sold, Henry's note is paid off in full, and the New Company buys his royalty out at five times the last twelve months' royalty. If he dies, his note and his royalty pass to whomever he has named, and the payments continue to them.
Henry is retired either way. The questions are how much he got for what he built, whether Patrick got the help a real handoff needs, and whether the business survived in a form Henry would recognize.
The Numbers
What Henry receives each year, before tax, on the broker deal and under Seller Financing. Note payments are fixed obligations, expected to be paid in full with interest. Henry's royalty is a projection: it depends on how much the business grows. The projection assumes earnings grow 12% a year through Year 5 and 7% after.
| Year | Broker deal | Note payments fixed | Royalty projected | Henry's total |
|---|---|---|---|---|
| Closing | $792,200 net cash | — | — | −$32,500 closing costs |
| 1 | $116,300 | $219,400 interest + paydown | $5,600 | $225,000 |
| 2 | $111,700 | $257,500 | $11,900 | $269,400 |
| 3 | $82,000 | $271,200 | $19,000 | $290,200 |
| 4 | — | $268,800 | $26,800 | $295,600 |
| 5 | — | $251,700 | $35,700 | $287,400 |
| 6 | — | $217,400 | $41,500 | $258,800 |
| 7 | — | $217,400 | $47,600 | $265,000 |
| 8 | — | $217,400 | $54,200 | $271,600 |
| 9 | — | $121,600 paid off | $61,300 | $182,900 |
| 10 | — | — | $68,900 | $68,900 |
| 12 | — | — | $85,600 | $85,600 |
| 14 | — | — | $104,800 | $104,800 |
| 16 | — | — | $126,800 | $126,800 |
| 16 years, before tax | $1,102,300 | $2,042,200 | $977,100 | $3,019,400 |
| After tax | about $950,000 | about $2,550,000 after closing costs | ||
Henry's HVAC worked example from the Ojenta Business Sale Model: Annual Sales $1,900,000; SDE $390,000; Business Value $1,170,000 (3.0× SDE) plus a $225,000 working-capital peg; brokered sale $936,000 (20% discount) plus the same working capital. Seller Financing: the business's assets sold for a $1,395,000 note at 9%, interest only in Year 1, then a ten-year schedule, paid off in Year 9 on these numbers because unearned profits go toward paying it down; a royalty of about 12% of SDE growth above the closing year. Years 11, 13 and 15 omitted from the table but included in the totals. Taxes are estimates for a married couple filing jointly in North Carolina — not tax advice. Try other assumptions in the Business Sale Model Calculator.
The Full Picture
The structure works because everyone's interests point the same way: a business that keeps growing after Henry hands it on. Here is what the others receive on the same numbers.
| Year 1 | Year 5 | Year 10 | |
|---|---|---|---|
| Patrick, the Protege — brings no down payment personally; runs the business | |||
| Fee for running the business fixed, paid by the company | $120,000 | $135,100 | $156,600 |
| The Mentor — independent; paid in cash, no stake | |||
| Fee paid by the company, Years 1–5 | $15,000 | $10,000 | — |
| The New Company — owned by Patrick and an Ojenta subsidiary; no commission | |||
| Its share of profits projected; after the note | $32,200 | $180,200 | $630,700 |
Patrick and Ojenta own the New Company between them. Patrick earns his part over five years as he proves himself, and it grows only as Henry is paid. Ojenta takes no commission from Henry's price; it is paid only from the New Company's profits, so only if the business does well after Henry leaves. The Mentor is paid for guidance and holds no stake, so the Mentor's judgment on Patrick's progress is not bought.
Illustrative examples only. All business names, sector composites, and personas in Ojenta's models and worked examples—including Henry's HVAC, Apex Remodeling Group, Midwest Multi-Trade Services, Fox River Pest Control, and individuals such as Henry and Patrick—are fictitious. They are provided solely to typify businesses and transactions in their respective sectors and size ranges. No depiction of any actual company, trade name, trademark, or person, living or dead, is intended. Any similarity to real businesses or persons is accidental and not intended.
If you are thinking about your exit — this year, next year, or five years from now — this is the right time to talk. Early conversations are how the best transitions begin.
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