6 Common Exit Strategies for Contractors

Contracting is a capital-intensive and risky business with potentially volatile profit margins.

D. Brown Management

November 20, 2018 2 minute read

The construction business is also amazing, with the owners making a good return on their capital. Management teams and employees earn a great living while building projects they can be proud of that will last for generations.

Succession: Six Common Exit Strategies for Contractors. Liquidation, Pass Down to Family, Strategic Sale to Outside Buyer, Merger with Similar Contractor, Sale to Management, Sale to Employees.

The majority of contractors are privately owned by a small group of people who are usually also managing the business.

Over time, those owners need to:

Reduce how much time they spend in the business
Get their capital out of the business
Reduce their risks

There are 6 common exit strategies for these owners:

Wind Down / Liquidation

Pass Down to Family

Strategic Sale to Outside Buyer

Merger With Similar Contractor

Sale to Management

Sale to Employees (ESOP)

Each of these strategies has different dynamics for the net valuation amount, time, and risk. Not every strategy is available to or right for every contractor.

We will explore each of these in more detail with future posts to help you identify which might be best for your situation.

This Series (3 of 45)

Succession - There is No One Best Way Accelerating Retirement & Succession 6 Common Exit Strategies for Contractors 7 Major Stakeholder Groups in Ownership Transitions Contractor Exit Strategy 1 of 6: Winding Down or Liquidation