Building your company’s succession plan is the first step to ready the organization for the next chapter. The plan also has to be implemented and that begins with “preparing the company.” What do we mean by preparing the company? Let’s review three areas of consideration.
People
The lifeblood of any construction company. Without the right people (and leadership), a construction company is just a collection of equipment and dreams.
- Do the people currently in your organization want to lead the company?
- Do the people currently in your organization have the leadership tools to effectively lead the company?
- Is the next generation focused on growth, sustainment, or pursuing a different type of work?
- Will the labor force work for new management?
Financial
Is your company ready to be transitioned?
- Is the company sized such that one or more employees can buy it and run it?
- Are you willing to assist with the purchase process?
- Can the company still generate surety credit in sufficient capacity after a buyout?
- Do you want to sell 100% of the company at one time, or a phased sale/transition?
Legal
Are there any considerations for structure, qualifications, or experience requirements?
- Are your operating agreements and/or buy-sell agreements up to date?
- Should an entity sell itself as a stock sale or an asset sale?
- Is this a time to transition business entities for legal or tax considerations?
No need to overly complicate any one of these, but all are vital. Many people are first-generation business owners trying to figure this out on their first try. Don’t be afraid to hire specialists that have a proven track record of success.
We will be presenting with Travelers Surety Company and Woods and Aitken on this topic and more April 23rd in South Bend, Nebraska. Let us help you “Ready the Bench.”