How a fabrication business grew sales from €2 million to €7 million after a shareholder exit

The starting point

This family-run fabrication business supplied the construction industry across Leinster. Tommy's involvement began in 2021 with the sale of a co-founder's 50% shareholding.

At the start of the engagement, the company had annual sales of approximately €2 million and 18 staff.

The advisory approach

1. 01

   Ownership transaction

   Tommy brokered the sale of the co-founder's shareholding. The relationship then developed into a broader advisory engagement through the Net Profit Planning Programme.

2. 02

   Management structure

   He established a board of management and became Chairperson, setting the agenda and chairing monthly meetings. These created a regular forum to challenge management thinking, raise ambition and bring accountability to the senior team.

3. 03

   People and profitable growth

   Tommy helped recruit senior staff and kept a strong focus on gross profit margin alongside sales growth. The aim was not simply a bigger business, but a better margin on every sale.

What changed

Annual sales increased from approximately €2 million to approximately €7 million, while the team grew from 18 to 30 people. Gross profit margin increased from 30% to 40%, an improvement of 10 percentage points.

The business grew both its sales base and the share of each sales euro kept after direct costs. Sales growth on its own would not tell the full story.

A shareholder exit as the starting point

When one of two founders wants out, the business faces a real test. The departing shareholder needs a fair deal, and the remaining owner needs to come out of it with a company that can still grow. Tommy brokered the sale of the co-founder's 50% shareholding, drawing on more than 20 years as a business broker.

Once the transaction was done, the relationship carried on. That is often when the more valuable work starts, because the remaining owner now has full responsibility and a chance to reset how the business is run.

Putting a board in place

Tommy set up a board of management and chaired it, setting the agenda for monthly meetings. In an owner-managed business the owner can easily end up with nobody to challenge their thinking. A board changes that. It gives a regular, structured place to look at the numbers, question decisions and raise ambition.

Growing sales and margin together

Many businesses grow sales and find that profit does not follow. Here, gross profit margin stayed at the centre of the work alongside sales growth. Moving from 30% to 40% means the business kept an extra ten cent from every euro of sales after direct costs.

Senior recruitment supported this. As the team grew from 18 to 30, Tommy helped bring in the senior people needed to run a larger operation.

What Irish owner-managers can take from this

A change in ownership does not have to be a setback. Handled well, it can be the point where the business gets a proper structure, the right senior people and a plan that grows margin as well as sales.

The Net Profit Planning Programme is the structured approach Business Answers uses with owner-managed companies. It covers management development, sales and marketing, financial management, and business planning and control, so that growth is planned rather than left to chance.

Frequently asked questions

What happens when a co-founder wants to sell their shares?

The exit has to be handled so both sides get a fair outcome and the business keeps trading. Tommy brokered the sale of this co-founder's 50% shareholding, drawing on more than 20 years as a business broker, and the advisory work that followed grew sales from about €2 million to about €7 million.

How can a business increase profit, not just sales?

Work on gross profit margin alongside sales. This fabrication business moved margin from 30% to 40%, keeping an extra ten cent from every euro of sales after direct costs. Sales grew three and a half times, but profit grew faster because of the margin gain.

Why does an owner-managed business need outside challenge?

In a small company the owner often has nobody to question their thinking. A monthly board gives a structured place to look at the numbers, test decisions and raise ambition. It is one of the most consistent features across the businesses that grow well.

Should a shareholder exit stall the business?

Handled well, it can be the opposite — the point where the business gets proper structure, the right senior people and a plan that grows margin as well as sales. Staff here grew from 18 to 30 after the exit.

What is the Net Profit Planning Programme?

It is the structured approach Business Answers uses with owner-managed companies. It covers management development, sales and marketing, financial management, and business planning and control, so growth is planned rather than left to chance.