By Noah B. Rosenfarb, 3rd Generation CPA and Founder of Wealthrive.com

Dan and Sam weren’t just business partners—they were best friends.

They met on a ski lift line at Breckenridge in the early 2000s. By the time they hit the bottom of the slope, they’d talked about snow conditions, college basketball, and how awful the coffee was at the lodge. Two months later, they were co-founding a small logistics company out of Dan’s garage in Boulder, armed with one truck, two laptops, and a mutual hatred of bureaucracy.

The company—Stream Line Freight—grew slowly at first. They ran lean, hustled hard, and built a reputation for doing exactly what they said they’d do, exactly when they said they’d do it.

By year five, they had ten employees and contracts with three major retailers. By year fifteen, they had distribution centers in five states and grossed $42 million annually. They weren’t the biggest game in town, but they were respected, profitable, and proud.

Everything was great—until Dan turned 62.

“I want out,” Dan said one day over a whiskey neat. “Next summer. I’m ready.”

Sam blinked.

“Out of the business?”
“Yeah. Retire. Golf. Maybe finally hike Patagonia.”
“But what about me?” Sam asked.

“I figured you’d just buy me out,” said Dan.

Easy to say. Harder to do.

There was no buy-sell agreement in place. No pre-set valuation. No funding strategy. No legal structure to determine what would happen if one partner walked and the other wanted to stay.

They’d always figured they’d “just work it out.” But now that it was real? They couldn’t even agree on the value of the business, let alone the terms of the buyout.

Dan wanted a clean break—and a big payday. Sam wanted to stagger the payout over 10 years. Dan wanted to sell to a third party if Sam wouldn’t buy. Sam wanted to keep the company in the family—his daughter had just joined the team.

Tension grew. So did silence.

Eventually, they brought in advisors—Peter and Noah—to mediate and fix what should have been fixed 20 years ago.

“This is actually more common than you think,” said Noah. “Partnerships rarely fail because the business doesn’t work. They fail because the partners never planned for when their paths would split.”

Peter added, “You guys need a Life Cycle Buy-Sell Agreement. And honestly? You needed it years ago.”

Here’s how it worked for Dan and Sam:

• They agreed on a valuation method going forward—so there’d be no confusion if a partner exited due to retirement, disability, or death.
• They funded a life insurance policy on each other so the business would have cash ready in case one of them passed away.
• They created a buyout formula for voluntary exits (like Dan’s), funded by a combination of policy cash value, outside financing, and a structured note.
• Dan got his retirement cash.
• Sam got control of the company.
• Everyone stayed friends.

“Looking back,” said Sam later, “the hardest part wasn’t the numbers. It was realizing we hadn’t protected each other—or our employees, our families, or our legacy. We just got lucky. But luck is a terrible business plan.”

Whether you’re two best friends in business or five siblings managing a legacy company, you must have a plan for what happens when life happens.

A Life Cycle Buy-Sell Agreement isn’t just a legal document. It’s peace of mind. It’s the guardrails that keep your business intact when owners change, retire, or pass away.

It’s what ensures the company doesn’t die just because someone wants to hike Patagonia.

If you’re running a successful business, talk to someone about protecting it. Even if you’re not ready to walk away, one day—someone will be.

Download our free Wealthrive Fire Drills HERE.