Issue 4 of 9: Financial Partners

Construction Ownership Transition Issue 4 of 9: Are Your Financial Partners, including Bank and Surety, Onboard with the Transition?

D. Brown Management Profile Picture
Share
Succession: Ownership Transition Issues - Number 4 Financial Partners. Construction is a cash-intensive business. Ownership transitions require even more cash.
  • Engage them very early in the process to understand what they are looking for. Because they see this a lot, they often have great advice for owners making transitions. 
  • Start building the relationships with the management team early.
  • Get a good understanding of the capital and collateral that will be required to be left in the company for the bank, surety, and insurance.  
  • Build these requirements into your financial model of the transition and build some cushion in because things will never go as planned.
  • If a personal guarantee will still be required from the current owner(s) for a period of time, set a value for what that guarantee will be worth for them if they are willing to take that risk at all. This will typically be a percentage for what is guaranteed paid annually.  
  • Depending on the exit strategy, this may or may not be that big of an issue, but the financial partners are one of the major stakeholders in the transition. 

Succession
Continue building value in your business, yourself and your key team members with a good succession strategy....

Succession
Continue building value in your business, yourself and your key team members with a good succession strategy....

The Leadership Vibrancy Curve
Leaders must navigate (1) the stages of contractor growth, (2) the phases of management team development, and (3) the arc of their own career and life. Maintaining the right levels of leadership vibrancy leads to sustainable scaling and succession.
Fee Structures for Preconstruction Services and CM@Risk Projects
How much should you charge? How much can you charge? How should you structure it? What do you really want out of it? Answering these four questions sets the stage for effectively selling your preconstruction services.
Jack Welch - Short and Long Term
We exist to help contractors build stronger businesses for the next generation. That is not only our mission at D. Brown Management but should also be the mission of EVERY leader within a construction business.