6 Common Exit Strategies for Contractors

Contracting is a capital-intensive and risky business with potentially volatile profit margins.

D. Brown Management Profile Picture
Share

The construction business is also amazing, with the owners making a good return on their capital. Management teams and employees earn a great living while building projects they can be proud of that will last for generations.

Succession: Six Common Exit Strategies for Contractors. Liquidation, Pass Down to Family, Strategic Sale to Outside Buyer, Merger with Similar Contractor, Sale to Management, Sale to Employees.

The majority of contractors are privately owned by a small group of people who are usually also managing the business. 

Over time, those owners need to: 

  • Reduce how much time they spend in the business
  • Get their capital out of the business
  • Reduce their risks

There are 6 common exit strategies for these owners:

  1. Wind Down / Liquidation
  1. Pass Down to Family
  1. Strategic Sale to Outside Buyer
  1. Merger With Similar Contractor
  1. Sale to Management
  1. Sale to Employees (ESOP)

Each of these strategies has different dynamics for the net valuation amount, time, and risk. Not every strategy is available to or right for every contractor.  

We will explore each of these in more detail with future posts to help you identify which might be best for your situation.  


Succession
Continue building value in your business, yourself and your key team members with a good succession strategy....

Succession
Continue building value in your business, yourself and your key team members with a good succession strategy....

4C Troubleshooting of Personal Task Execution
Ask great questions around the four interrelated categories that cause most failures in outcomes or process, including choice, capabilities, capacity, and controls.
Stages of Growth and Identifying Actionable Objectives
Growing contractors face an overwhelming amount of problems and opportunities as they move through the different stages of growth.
The Best Contracting Methods for Preconstruction Services
Moving seamlessly from preconstruction to construction requires solid contractual documents modified to fit your particular project and structure.