Your Transition Plan Might Need to Start Now
Everyone in the built environment wants to know the trick to successfully selling a business or executing well on any exit strategy. Is it assembling a team of the best advisors, building a huge backlog, or having a strong second tier of leaders?
Those things are great, but the secret to successfully selling a business in the built environment is to PLAN.
When talking to firm owners, partners, and principals in the built environment, we often hear that they are planning a transition or a sale of their business, “…in 4 or 5 years.”
Our response to that is, that if that is the case, you should start the transition / selling process now.
Consider the following timing:
- The first step of the process once engaged with an M&A firm that is 100% focused on the built environment, like Stonemill, is the valuation of your business. After the valuation a confidential information memorandum (CIM) / marketing package is prepared. At that point Stonemill is ready to go to market representing your business for sale. Prospective buyers are then contacted.
- Once an interested prospective buyer, that is a cultural fit for your business is identified, the initial conversation happens between you and the prospective buyer. If the initial conversation goes well, face-to-face visits take place, additional information is requested from the prospective buyer, and next steps are identified.
- At this point, the prospective buyer will most likely submit a Letter of Intent (LOI) to purchase your business. Once a letter of intent is accepted by you, a period of due diligence opens and lasts 45-60 days, closing documents are prepared and finalized and closing then takes place.
- In addition, the buyer will most likely require a 2–3-year transition period from you to stay on with the business post-closing.
The process from start to finish including your transition will take approximately 3 -4 years. If your time frame objective of completing a transition is 3 to 4 years away then the time to start the transition process, is NOW.
To learn more about the process of selling your firm in the built environment contact us today.