IT’S NEVER TOO EARLY TO BUILD YOUR EXIT STRATEGY
The construction industry requires construction company owners to wear many different hats. Your days are long and exhausting. Dealing with employees, balancing your books, and buying and maintaining equipment takes a lot of time. With so much that you are doing with your business, it’s likely that creating an exit strategy isn’t at the top of your list. No matter the size of your business, the day will come when you will want or need to transfer ownership of your company. Some careful planning now can make this transition a pleasant one for all involved when that time comes.
1. Amidst the Chaos Create a Plan
With economic downturns, regulations, and other challenges impacting the construction industry it’s easy to go into survival mode. But, even when it seems futile to do so, you have to keep your eye on the future and create a plan for the next phase of your life and the strategy for leaving your business. Don’t wait until “the right time” to create your plan. If you own a business, now is the right time to create your exit strategy. Just like with anything else in your business, you have to put together a plan for achieving your goal.
2. Set a Realistic Timeframe
Ideally, you should give yourself at least two or three years to execute your plan. If you are further away from making this transition, that’s fine. You still need to have the plan prepared and know what actions you will need to take two or three years out. And, you can alter the plan as needed over the years.
3. Know Your Company’s True Worth
Most business owners have a tendency to over value their business because it’s personal and is likely one of their most valuable assets. This is when it is important to get an objective, independent business valuation done by a professional experienced in the construction industry. Do this before implementing your exit strategy, as your plan is contingent on how much the company is worth now and how much you want it to be worth when you want to exit. The valuation process is very informative, giving you insight on your place in the market, industry trends, opportunities available, and risks facing your business.
4. Take Steps Now for Success Later
You can take actions now that will pay off in the end, enhancing the value of your company and the ease of the transition to new ownership.
- Groom as successor. This person doesn’t have to be the one who will actually take over ownership of the company, but they should have the knowledge to do so, as this will be very valuable to the new owner.
- Keep your business finances in order. If you do this, you will always have a clear picture of where you stand.
- Keep your employees happy. Happy employees almost always equate to a successful business that can run smoothly even when you’re not there. This is very attractive to buyers.
- Diversify your business. The decision to add new products and services to your existing business is a wise one. Creating new revenue streams increases the value of your company and its ability to sustain market conditions. This makes your company more valuable to potential buyers.
Preparing to leave your business takes time, an open mind, and a plan. You want an exit plan that will help you attain your goals. Put the time in now as your building your business to prepare for the day when you are ready to leave it.
READY TO LEARN MORE?
Ready to learn how you can diversify your business to increase revenue now while also making your business more attractive when you go to sell it? Pick up the phone and give us a call. Shoot us an email. Let us give you the answers you are looking for to get started on the Delta Disaster Services path to success.