9 Ownership Transition Issues Specific to Contractors

All businesses face challenges with an ownership transition.

D. Brown Management Profile Picture
Share

There are nine interrelated issues that heavily impact contractors. 

Succession: 9 Ownership Transition Issues Specific to Contractors.

We will dive deeper into each of these over the next week:

  1. Strength and alignment of the management team (post-deal)
  1. Culture of the company - Is it prepared for an ownership succession and compatible with the new owner? Seems “soft” but is very “hard” and can destroy value quickly.  
  1. Key relationship continuity with employees, customers, and others.
  1. Financial partner alignment with banking, surety, and possibly insurance.  
  1. Cash generation capabilities.
  1. Asset vs. stock sale - who owns past liabilities, how are they quantified, and what is the tax implication?
  1. Sustainable growth strategy and plan to ensure value is created for all stakeholders.  
  1. Future direction of the construction industry and ensuring you are neither selling nor buying the equivalent of a horseshoe manufacturer and installer in 1900.  
  1. Extremely low barriers to entry for new contractors can easily create competitors out of unaligned stakeholder groups, which often destroys value.  

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....

Ownership Transition - Key Seller Risks
Whether you are buying or selling a construction business, it is important to understand the perspectives of the other party. Each will tend to discount the risks of the other, impacting the ability to create the best deal.
Creating an Operating Rhythm
What are the critical meetings, communications and feedback systems that keep your contracting business running like clockwork?
Knowledge Management Pyramid
Knowledge Management is a complex topic and the contractors who learn to manage it the best will have an edge in the market. There are several models that can help you visualize the differences between different types of “knowledge” in your organization.