Succession Planning for Construction ContractorsJuly 27, 2017
Construction contractors are among the hardest-working professionals in the workforce. Between the physical labor and the organizational demands of running your business, succession planning can easily fall by the wayside if you don’t make a concerted effort to plan for the future. The construction industry is also changing dramatically due to politics, adding yet another layer to the need for a vision beyond that of your current ownership. Here are a few tips for effective contractor business succession planning:
You likely have short-term goals for your business, but what about after you pass down the company? Before you can designate successors and roles, you need to have a strong grasp of the legacy you want your business to hold. If you are focusing on family business succession planning, this will intersect with your estate pand tax planning.
Business changes by the day; don’t let your succession plan accumulate dust. Any time something changes with your personal or business finances, you should revisit your succession plan with your accountant to make any necessary changes. The ever-changing nature of business and tax laws makes adaptation crucial.
Construction is a highly skilled and regulated field, which means your successors need to be as capable of running the business as you are. Invest the time to not only train them, but also impart your knowledge on them. You might consider incentivizing successors to take incremental steps toward leadership, and should also align roles with a leadership hierarchy that delegates different tasks to different people.
Seek a Valuation
Even if you have no intention of selling your business, a valuation can provide you with a world of insight to help with your succession planning. After all, in order to plan for the future, you need to know where you stand in the present. Learn more about business valuations in our previous blog, “More Than a Number: What Business Owners Need to Know About a Valuation.”
Communicate the Details
Successors’ compensation, interests, ownership and incentives are critical details in the big picture that is succession planning. You want everyone to be on the same page so that the business can move forward seamlessly when a change of hands takes place.
Work with an Expert
Lastly and most importantly, be sure to engage an accountant who has experience in succession planning–particularly in the architecture, engineering and construction sector–to help you draft and manage your plan. As a member of the Utility and Transportation Contractors Association and the Shore Builders Association of Central New Jersey, The Curchin Group is uniquely in tune with the workings of A/E/C companies. Learn more about our succession planning and construction accounting services here.