Only about 30% of business owners successfully sell their businesses. Many construction company owners can’t imagine passing the reins while others are simply too focused on the day-to-day running of the business to take time to build an exit strategy. They often either plan to hand it off to an heir who may or may not have the skill and means to manage it, or tackle a sale when they’re ready to retire. In a worst-case scenario, circumstances beyond their control may force a transition.
In any case, a lack of planning can be costly or even fatal to a business. In fact, today is the best day to start planning to sell your company – even if you have no intention of doing so. Here’s why:
Immediate business improvements
Just as when you prepare a house for selling, prepping a business for sale forces you to address flaws, improve “curb appeal,” and make it as compelling as possible to buyers. These steps force you to boost some basics like optimizing processes, addressing improvement opportunities, and having the right leadership in place. Take this time to ensure you have a clear value proposition and growth plan because future growth means future value. All of this will fundamentally improve your company.
Getting financials in order
Putting your financials in order will not only make valuation of the company easier – it will also open your eyes to tax opportunities and create a path for a tax plan that maximizes profitability. Precise financials also allow you to see exactly where money is coming from and going, making it easier to see strengths, weaknesses, and opportunities.
Peace of mind
You may have spent decades building your company. It’s likely a huge portion of your net worth, if not your career legacy. Working to ensure that it goes into the right hands or delivers maximum value at sale when you’re ready to move on will help you sleep at night.
Opening options
The CBIZ Deal Advisory Team works with business owners every day to help them maximize value, deliver financial security, and manage transitions. The selling options for business owners are flexible and diverse, including ESOPs, traditional succession, M&A, and other divestitures.
Private equity possibilities
Because construction is incredibly fragmented and enjoying considerable tailwinds in energy, data center, and infrastructure, private equity firms are currently very active in the sector. In other words, now might be the best time to sell to private equity. The nice thing about this type of sale is that buying firms often prefer that sellers retain a significant stake and role in the business if they desire. This can allow for a path to retirement alongside long-term financial security and liquidity.
Getting your company ready for a sale doesn’t mean you will sell it. Instead, it means you’re planning for your future, protecting a legacy you’ve built, and getting significant benefits for your company along the way.
Life, macroeconomics, and the challenges of business can throw curveballs at any time. It pays to take a bit of time to prepare for whatever is next. Reach out to CBIZ for help building a clear plan for any eventuality. You and your business will be better for the effort.
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