What does it look like? What could you do to make it better? What’s happening with succession planning?
The British Columbia Construction Association (BCCA) commissioned a succession survey in 2012. The 100+ respondents represent a cross-section of the industry by trade and by size, and come from all of the regions serviced by the BCCA. Key findings include:
• 69% of owners are at least 50 years of age.
• 57% have been in business longer than 16 years.
• 62% have 10 or fewer employees.
• 35% want to exit within five years; another 39% in five to 10 years.
• 23% will sell to a family member, 67% to non-family, and 10% will stay on in the business.
• 14% expect to get between $300,000 and $500,000 for their businesses.
• 56% expect to get more than $500,000 for their businesses.
• 3% have a formal, documented Succession Plan.
• 41% have an informal, undocumented Succession Plan.
• 56% have no Succession Plan whatsoever.
• 34% of those with a Succession Plan (documented or otherwise) got advice from their accountants.
•72% would like to be informed of opportunities for help with business transition.
Do employee focus groups. Get their opinions – ask the
magic wand question: “What changes should we make to the
business? What are key elements of going forward?
There are six critical factors every successful business
manager should know:
1. Our most profitable products or services.
2. Our most profitable customers.
3. The expense drivers for those customers
4. This is how we keep good control of our cash flow
5. Three of the Critical Success Factors (CSFs) for our business.
6. Here’s how we identify, measure and monitor Key Performance Indicators (KPIs) for the CSFs – Give one example
Taking the business to the next level
1. How critical is the owner to daily operations?
2. How long has the business has been active, and what is sales volume?
3. How price-sensitive are the customers?
4. What percent is ongoing contracts, such as planned
5. What percent is repeat work and referrals?
6. Does your business have exclusive territory, special brands, certain group memberships, etc.
Would someone buy your business?
The 10 Commandments of Buying a Business
1. Price is based on history. It does not guarantee the future. Evaluate the potential.
2. Buy a good track record. Keep away from turnarounds. Buy something with a proven track record and spend your energies on fine tuning.
3. Take control. When you buy someone’s business, you are losing a key element of that company’s success—namely, the previous owner. Make sure you take control.
4. It’s all about making money. Don’t fall in love with employees, location or products. Fall in love with profits. Keep your objectivity.
5. Focus on the few keys that you add to the business. Don’t get sidetracked. Don’t develop bad habits.
6. Improve processes. Use technology to the max and develop Key Performance Indicators for you and your managers.
7. Find the nuggets. Talk to your customers and your employees and ask them the Magic Wand Question: If you had a magic wand, what one thing would you change
about our business?
8. Three musts: Explain things in simple terms. Nothing beats a great attitude. You and your team should be proud of what you’re doing.
9. Keep looking for flaws and fix them. The devil is in the details.
10. Have fun and make sure your team has fun, too.