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.
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:
- The leadership ability to align the team together around the right strategies and priorities to continue sustainably growing the business even in the face of a changing industry. Do they trust each other?
- The demonstrated ability to improve each of your key scoreboard metrics through balanced execution across the business. Rate each person, each metric, each area. Where are the gaps?
- For each key team member, what is the probability that they will stay with the team?
What do you need to do to improve these scores?
What is it worth to improve these scores?