You've built a contracting business over many years. An exit plan helps you leave on your terms, get paid fairly and protect your employees and customers. Use this checklist as a starting point.
- Set your timeline. When do you want to stop working day to day? When do you want to be fully out?
- Define your goals. Price, keeping your team, your company name, staying involved part-time, income from real estate.
- Get a baseline valuation. Start with our free estimator, then get a real valuation based on your financials.
- Clean up financials. Three years of clean books, separate personal expenses, document add-backs.
- Plan the license. Identify who will qualify the business after you. Encourage a key employee to get licensed or agree to stay on as qualifier for a period. See license transfer.
- Build your bench. Promote a lead, foreman or office manager who can run the day to day.
- Document processes. Estimating, scheduling, purchasing, job costing and customer service.
- Review contracts. Customer agreements, supplier accounts, leases and warranties.
- Decide on your real estate. Sell it with the business or keep it and lease it. See selling with real estate.
- Choose your buyer type. Family, employees, competitor, private equity, or a local direct buyer.
- Structure the deal. Cash at closing, seller financing, earn-outs, consulting agreement. Consult your CPA and attorney.
- Plan your transition and life after. Introductions to customers and suppliers, a defined handoff period, and what you'll do next.
Common mistakes
- Waiting until burnout or health forces a rushed sale.
- Being the only person who holds the license, estimates and sells.
- Mixing personal and business expenses until the books can't be trusted.
- Letting key equipment run down in the final years.
Also read succession planning for retiring contractors. When you're ready, we're glad to have a confidential conversation.
This guide is general information, not legal, tax or financial advice. Consult your own attorney and CPA.