Issue 1 of 9: Strength of the Management Team

Construction Ownership Transition Issue 1 of 9: Strength and Alignment of the Management Team

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Beyond liquidation, nearly 100% of the value of a construction business is based on the post-transition management team's ability to continue profitably growing the business. 

Succession: Ownership Transition Issues - Number 1 Management Team. Nearly 100% of a Contractor's Valuation Beyond Liquidation Value is based on the post-transition management team's ability to continue profitably growing the business.

The exit strategy and deal structure will not materially improve the strength or alignment of the management team, though it could have a significant negative impact.

Those managers with 20-plus years of experience who have made most of the mistakes that can be made, learned their lessons, built the relationships, and still have significant professional runway left are in very short supply. This will continue to get worse over the next 10 years. 

Take a hard look at your management team and what they would look like after an ownership transition.  On a scale of 0-10:

What do you need to do to improve these scores?

What is it worth to improve these scores?


Issue 1 of 9: Strength of the Management Team
Continue building value in your business, yourself and your key team members with a good succession strategy....

Issue 1 of 9: Strength of the Management Team
Continue building value in your business, yourself and your key team members with a good succession strategy....

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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.
Issue 7 of 9: Growth Strategy
Construction Ownership Transition Issue 7 of 9: In general, with all other key factors including cash flow, profitability, and customer satisfaction being equal, a contractor that is growing will be able to better handle an ownership transition.