Most contractors spend decades building a business and very little time planning how to leave it. Starting early gives you more options, a higher price and a smoother handoff for your employees and customers.
Start earlier than you think
Many advisors suggest beginning succession planning several years before you want to step away. That gives you time to clean up financials, build a management layer and resolve licensing questions.
Your main options
- Family. Passing the business to a son, daughter or relative. Works well when they are qualified and want it, but it often involves seller financing and careful estate planning.
- Employees. Selling to a key employee or group of employees. They know the business, but may need financing help.
- Outside buyer. A local individual buyer, another company, or a private equity-backed group. An outside buyer may provide more cash at closing.
- Closing down. Selling equipment and winding up. Usually the lowest-value outcome, since it doesn't capture customer relationships, brand or team.
Plan the license
In Florida, contractor licenses belong to individuals. If you are the qualifier, the business needs a new qualifier after you leave. Encouraging a key employee to get licensed, or agreeing to stay on as qualifier for a period, can make the business more sellable. See Florida license transfer when selling.
Make yourself less necessary
- Delegate estimating, scheduling and customer relationships to others.
- Document how things are done: pricing, dispatch, purchasing, job costing.
- Put key customer and supplier relationships in writing where possible.
- Train a second-in-command.
Get the numbers in shape
Use an outside accountant, keep business and personal expenses separate, and track revenue by service line. Three clean years makes a real difference in a sale.
Decide about your real estate
If you own the building or yard, decide whether to sell it or keep it as income. See selling a business with real estate.
Assemble advisors
A CPA, a business attorney, and a financial planner can help with tax planning, deal structure and what you do with the proceeds.
Talk to buyers before you need to
A confidential conversation with a buyer, even years ahead, can show you what they value and what to work on. We are glad to have that conversation with no obligation.
This guide is general information, not legal, tax or financial advice. Consult your own attorney and CPA.