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....

Using Checklists Effectively
Too many construction businesses needlessly run on razor-thin margins due to poor productivity. Checklists are a very simple and powerful tool that can be used to mitigate many of these problems.
Collections and Retention Trend Metric
Assuming that a contractor’s project team has done an effective job of aggressively billing the project, the biggest variable that remains for cash flow is the effectiveness of collections.
Bureaucracy - Stifling or Enabling
Talent density versus the complexity of the construction business or project is what determines the level of bureaucracy required for sustainable growth.