Whether you’re considering selling your construction company internally or to an outside buyer, the best strategies involve planning your eventual transition several years in advance. Somewhere between three and seven years in advance is good timing, time enough to identify issues and implement solutions. There are several areas that, if focused on, will help to drive the value of your company higher in the eyes of potential buyers.
The first and most important item to consider is your corporate setup. Any business where the owner wears all the hats and performs most of the management duties is not going to be valued highly by a prospective buyer. A buyer wants to step into the shoes of the owner with the time to run the business effectively. Construction company owners often act as their firm’s lead estimator, project manager, head of the HR department and in other roles because they don’t have people on their internal team talented enough to handle those duties. It’s important that, several years ahead of a prospective transaction, the owner spend time and resources putting the right pieces in place so that the business can run without him. If a buyer sees he will have to spend long hours just keeping the business running, your business won’t sell for as much as it would otherwise.