Issue 9 of 9: Low Barriers to Entry

Construction Ownership Transition Issue 9 of 9: There are Few Barriers to Entry for New Contractors.

D. Brown Management

December 10, 2018 1 minute read

Succession: Ownership Transition Issues - Number 9 Barrier to Entry. Don't Let an Ownership Transition Create Another Construction Contractor to Compete With You.

About 500 construction contractors start up each day.

Many of those are just people having an “entrepreneurial seizure,” as Michael Gerber describes in The E-Myth Contractor.
A few of these will have the grit and skills to build the ENR Top 400/600 contractors of tomorrow.
Others are experienced construction executives who will go on to build substantial construction businesses relatively quickly.
In most cases, a new contractor starting up will cause a serious talent drain on the contractor they leave, as well as changing the competitive landscape.

Make sure that your ownership transition plans don’t create another competitor.

Issue 9 of 9: Low Barriers to Entry

Continue building value in your business, yourself and your key team members with a good succession strategy....

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Issue 9 of 9: Low Barriers to Entry

Continue building value in your business, yourself and your key team members with a good succession strategy....

Previous Next Go To Series

Related Insights Series

Organizational Structures and Leadership Development

As contractors look at their organizational structures with an eye toward both sustainable growth and succession, they must balance the efficiency a functional area structure provides with the leadership development of a business unit structure.

Ownership Transition Timelines

While it is possible for ownership transition timelines to be accelerated, that largely depends on the current condition of the company, including the management team and current owner.

Valuing a Construction Business

There is no single right way to value a construction business, although there are many methods that have validity. Keep in mind that the definition of “Fair Market Value” is quite simply what a willing seller and buyer agree to.