Issue 9 of 9: Low Barriers to Entry

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

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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.  


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....

Stages of Growth and Identifying Actionable Objectives
Growing contractors face an overwhelming amount of problems and opportunities as they move through the different stages of growth.
Observe, Hypothesize, and Experiment
Contractors would run much better, including improved field productivity, if they applied the simple lesson we all learned around middle-school science class: Stop debating and start experimenting.
Succession at All Levels
If a construction company is growing at 15% per year, then it will double in size about every five years. Therefore, in general, every position must be training at least two people that will be capable of succeeding them within five years.