Contractor Exit Strategy 3 of 6: Strategic Sale to an Outside Buyer

Every contractor wants a strategic sale to an outside buyer.

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Specifically, an outside buyer that sees such a strong strategic fit with their business that they are excited to pay a 6X earnings multiple of the best performing year the contractor has had during the last three years in cash. 

Succession: Exit Strategy 3 of 6 - Strategic Sale to Outside Buyer.

Fact: Most media coverage of deals is either a strategic sale or a catastrophic liquidation through bankruptcy. This can skew a contractor’s view of the market.  

Fact: Only a small percentage of ownership transitions could be considered strategic sales with high valuation multiples.

Fact: The only way a high valuation makes sense for the buyer is if the contractor has either a competitive position, technology, or process that can be scaled up significantly with access to more capital or other operational assets the buyer has. The ROI (Return-on-Investment) still must pencil out for the buyer.  

Fact: Few contractors have truly built highly scalable competitive advantages that make this type of exit an option.  

Fact: If you have truly built scalable competitive advantages that require more capital to execute then an outside strategic buyer is your only option.  


Contractor Exit Strategy 3 of 6: Strategic Sale to an Outside Buyer
Continue building value in your business, yourself and your key team members with a good succession strategy....

Contractor Exit Strategy 3 of 6: Strategic Sale to an Outside Buyer
Continue building value in your business, yourself and your key team members with a good succession strategy....

Field Productivity Grand Slam
When contractors are truly successful at improving their field productivity it is like Mickey Mantle’s pivotal Grand Slam during game 5 of the 1953 World Series. The bases are loaded. You are at bat. The Big Four productivity home runs:
Build Your Most Valuable Asset
There are five main value levers that contractors can pull to truly increase the value of the business as measured in long-term return on capital and valuation during a succession.
Scoreboards & Scorecards: Talent Development + Business Results
Once someone understands the basics of the task to be done, nothing will improve performance faster than actionable and timely feedback. People align around common scoreboards (think sports) while more detailed scorecards guide decisions and development.