6 Common Exit Strategies for Contractors

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

D. Brown Management Profile Picture
D. Brown Management
November 20, 2018 2 minute read
Share

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:

  1. Wind Down / Liquidation
  1. Pass Down to Family
  1. Strategic Sale to Outside Buyer
  1. Merger With Similar Contractor
  1. Sale to Management
  1. 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.  

6 Common Exit Strategies for Contractors
Continue building value in your business, yourself and your key team members with a good succession strategy....
Previous Next Go To Series
Related Insights Series
6 Common Exit Strategies for Contractors
Continue building value in your business, yourself and your key team members with a good succession strategy....
Previous Next Go To Series
Related Insights Series
The Average Field Day in Detail (Craft Labor + Foreman)
Labor is often the biggest cost variable on a construction project. Just over half the field hours are related to actual installation. Understanding how time is spent on average in the field is the first step to improving field productivity.
Related Article
What Must Be True...
Asking the right strategic questions will ensure profitable growth in all economic conditions. Daily operational management is about adapting to what is currently true. Effective executive leadership creatively bridges the gap between the two.
Related Article
Clear Installation Information
For a contractor to maximize their labor productivity, they need to start with clear information provided to the crews doing the actual installation. Good information is the first of the six pillars of productivity and means several things:
Related Article