Baltimore Business Broker to Speak at American Subcontractor Association Conference in New Orleans

Gregory Caruso, Esquire, CPA, CVA a principal at Harvest Business Advisors will be speaking at the National Subcontractor Association Meeting, Sub-Excel, Saturday March 8th 2014 in New Orleans.  Greg will cover the topic Family Transition and Family Business Succession in Subcontracting Businesses.   The presentation will focus on how to avoid pitfalls that destroy family businesses and sometimes the families themselves.  Greg has been involved in 100’s of business transitions as a principal, attorney, broker, and valuation professional.  Before becoming an advisor on succession matters for sub-contractors, suppliers, and engineers he grew up in a family contracting company and later co-owned another family construction company.

Want to know more about building value and selling your construction company – Click here to download a 20+ page e-book. 

Gregory Caruso, JD, CPA, CVA
Harvest Business Advisors
Business Brokers, Business Valuations, Business Succession for
Sub-Contractors, Construction Contractors, Suppliers, and Engineering Firms
www.harvestbusiness.com
609-664-7955

Business For Sale – Baltimore Business Broker Has Specialty Contractor For Sale

Sixty year old family owned and operated specialty design/build contractor for sale.  Owner is ready to retire.  Organized, with people, subs, and systems in place.  Profitable.  Revenues in the $1,000,000 to $1,500,000 range with cash flow coming in at $200,000 and up.   Business is located in the Towson – Baltimore Maryland market. Contact Ed Davis, CPA, CVA.

Harvest Business Advisors
Business Brokers and Business Valuations
Rockville, MD; Columbia, MD; Towson, MD; Baltimore, MD; Princeton, NJ
Connect with Harvest Business Advisors today – email info@harvestbusinessadvisors.com or call 443.334.8000

 

 

Business for Sale, Specialty Construction Contractor, Baltimore Area, Harvest Business – Business Brokers

Specialty Contractor – Baltimore, Maryland

$1 M of revenue, $300,000 of cash flow.  60 year old business.  Great website.  Sell to homeowners and contractors.  Smooth owner transition.  Very reasonably priced.  Harvest Business Advisors,  Business Brokers,  Contractor works in Towson, Timonium, Columbia, Ellicott City, Baltimore, Maryland.   For more info, email Ed Davis edavis@harvestbusiness.com

How Types of Customer Contracts effect Business Value

The types of contracts you have with your customers and the terms in those contracts will affect your business value.  This is particularly true of construction contractors, engineers, and subcontractors who often have long term projects.  The highest value goes to a long term, non-cancelable, highly profitable contract (this elusive contract is almost mythical I might add).  Clearly they exist but they can be fairly rare.  Below is the list of contract types.  The higher on the list, in general the more value created.

  • ·         Long term fixed price contracts (with profits)
  • ·         Long term T & M contracts
  • ·         Short term fixed price or T & M contracts with repeat customers
  • ·         New customers on negotiated jobs
  • ·         Repeat customers on competitively bid jobs
  • ·         New customers on competitively bid jobs

Time to Sell Your Construction Business? Please click here to download the e-book, “A Contractor’s Guide to Succession Planning”.

In general “repeat contract service work” has the highest value.  The lowest value is one time bid work for new clients.   

Who you work for impacts value too.  A contractor doing negotiated work for defense contractors and medical companies is going to be perceived as more stable than one building speculative office buildings.

What does your mix look like?  How can you improve your mix to get Your highest possible business value?

Gregory R. Caruso, JD, CPA, CVA
Harvest Business Advisors
609-664-7955

gcaruso@harvestbusiness.com
www.harvestbusiness.com

 

Family Business Succession, Exit Planning for Contractors, Engineers, and Others

It is tragic when a business or anything else splits a family into pieces.  Yet I see this all the time in family business succession matters. 

 This is particularly acute in the construction industry including specialty trades such as mechanical, HVAC, electrical and plumbing contractors because of the prevalence of family business.  Exit planning between generations is difficult at best.  Too often when the successor is chosen or when the stock is given or sold, the family fractures.  This is not success.  You can maintain peaceful Thanksgivings (maybe not all of them but most) and a successful business transition. 

Time to Sell Your Construction Business? Please click here to download the e-book, “A Contractor’s Guide to Succession Planning”.

Clear communication which includes listening to everyone is essential.  Continuing to communicate (listening – not just telling) after splits in family / business opinion is crucial.  It takes time (a long time, usually many years) and patience to accept that things may be different from what each family member hoped.  It takes determination to build a business and it takes determination to keep communicating when you do not like giving or hearing the message.  Communication in family businesses often requires creating a back channel with an outside person that really wants to see the whole thing work well for everyone.  This provides a vent and an opportunity for someone with no emotional claim to provide another view. 

A few more quick thoughts on transferring a family business: 

Fairness is a big consideration.  I don’t know what fair is but I often know if a situation is unworkable or just “way” unfair.   Giving a business to 5 children evenly when 2 work in the business and the rest do not is a disaster waiting to happen.  This is unfair to all.  Often, life insurance is used to “even” out the opportunity being given to the children “getting” the business and the other children.  Again, fair at the date this family/business decision is made and fair at the date of death 20 years later may or may not work out the way one hopes, but, it is much better than a guarantee failure. 

Another matter is the children who are to lead the business must be trained and groomed for the post.  Not all will be able to do it. 

I equate running a business to riding a bike.  You can ride in a child seat on the back for years.  It feels like you are riding the bike.  You have been looking over the shoulders of the rider and see everything she did.  But it is not the same.  Only getting on the saddle and grabbing the handlebars and peddling teaches you to ride a bike.

It is tragedy when the wrong child takes over and in a few years crashes a 35 year old family business.  No one wants to burden their child with that.  Telling a child that does not have the capacity is hard.  Killing the golden goose is even harder.  It just does not seem that way at the time you need to have the “you’re not the one” conversation.

How can the family test the child?  Can they let him run a division?  Perhaps start up a new company to tackle a growth area?  Nothing prepares or tests an owner other than being an owner.  Find a way to stress test the child if at all possible.

Another reason you are going to want to start the transfer early is generally the child is going to earn the money to pay for the business from the business.  If the parent has done really well there will be gifting for estate purposes but in most cases the value of the business is going to fund the parent’s retirement plan.  I would not advise any business owner to walk away from control and knowledge of what is really happening until the debt or payments to them are substantially made.  This means you need to start the transition well before mom and dad intend to spend 11 months of the year in Florida. 

In family business succession planning starting early and carrying through with clear communication including listening and consensus building is one key to creating an exceptional exit. 

Gregory R. Caruso, JD, CPA, CVA
Harvest Business Advisors
609-664-7955

gcaruso@harvestbusiness.com
www.harvestbusiness.com