9 Ownership Transition Issues Specific to Contractors

All businesses face challenges with an ownership transition.

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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....

Growth and Opportunity
Contractors that are growing profitably, have great reputations with their customers, and have a good culture are able to attract and retain the best talent even with the talent shortages the construction industry will face in the next 10+ years.
Deliberately Building Your Perfect Life
What did you do today to improve your value-add and do more of what you love? The foundation of all sustainably growing contractors is a team with each person individually strong, sharing common values aligned around a common purpose.
Cash Flow Tip 7 - Schedule-of-Values
Having a good SOV and billing format will set you up for cash flow success throughout the project.