Construction business owners hardly have enough time to transition from one project to another let alone develop an exit strategy for their business. If the retirement years are nearing, it’s important to plan for the future. At Cotney Construction Law, our team of Tampa construction attorneys helps construction professionals in all phases of their construction business. This includes everything from creating ironclad contracts to assisting contractors with selling their business.
Before you can sell your business, you must know the challenges that will be present along the way. In this four-part article, we will discuss several hurdles to selling your business and how our staff of experienced and knowledgeable attorneys can be of assistance. In this section, a Tampa construction lawyer will discuss the challenge an owner faces when they are so valuable to their company that the profitability of the business plummets the moment they retire.
How Valuable is the Business Owner?
Many contractors start their own business because they want to be their own boss. Naturally, they manage the business, perform all of the tasks, and only have a few employees underneath them. When the business owner is ready to retire, they are so valuable to the company that there is no value left after they exit. In other words, without valuable assets remaining and without consistent growth, the business is pretty much worthless once this person steps away.
Creating a Plan
To avoid having a company that immediately loses all value once the owner leaves, the business needs to develop their workforce and create a succession plan. Owners looking to sell need to consider the following questions before they retire:
- Do you have a family member or reliable employee that is capable of running the business after you leave?
- Is there a prospective buyer that could eventually take over, but needs to become familiar with your staff and business operations?
- Is your staff well trained and prepared for a transition of ownership?
- Will the clients experience any setbacks during this transitional period?
Selling a business can be a daunting task. If you own a construction business and have zero experience with the selling process, you should consult with an experienced and knowledgeable Tampa construction lawyer that can navigate you through the sale and help you maximize the selling price of your construction business.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.