Transitioning a company you have founded on blood, sweat, tears, and cash to the next generation is not easy. It requires a combination of clear planning, and bloody minded persistence to structure your company correctly, and identify and develop the next group of leadership. Many construction companies start too late, and don’t give enough thought to the process. Success depends on crafting a strategy now, and having the right people to guide and help you along the way.
In this week’s podcast episode, I talk to exit strategy experts Craig Boyce and Noli Snobar of BFBA. They give us a detailed explanation of proven exit strategies. Craig and Noli also talk about how to improve your company structure and the importance of providing mentorship to the younger generation in your company. You’ll go away from the interview with specific action items to jumpstart your succession planning process.
Don’t miss out on today’s episode!
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4:46 Why construction company owners struggle with succession planning
5:57 The definition of a good mentor
8:18 How construction company owners overcome their fears
10:04 Starting point of succession planning
12:34 Timeline for planning a transition
14:05 Better companies transition better
14:39 The importance of mentorship for the younger generation
16:05 Mechanisms that work for construction companies
17:07 Explaining the models available to owners and their partners
21:31 The LLC model
25:25 Personal indemnification as an obstacle to the transition
26:30 Definition of a strong balance sheet
27:55 Main reason the LLC model won’t work
31:35 Why parties involved should think the same
33:37 The right number of owners in a company
34:41 Who’s going to make the final decision from an ownership perspective?
36:59 Two triggering events
38:34 Greediness during succession and its effects
41:40 Finding time to do all tasks involved in a succession planning process
43:49 The need to keep trying and the consequences of quitting
45:55 Availability of private equity money in the construction industry
47:23 Action items to get the succession planning process started
About the Guest:
Craig Boyce is an Auditing and Accounting Partner who has been with BFBA since its inception. He has developed a niche in succession planning. He has assisted dozens of construction companies develop a successful business continuation strategy through ownership transition or business acquisitions and mergers.
He has also served as an expert witness in construction litigation and disputes. He has assisted companies in the refining and updating of buy-sell agreements and operating agreements, which have helped his clients avoid major pitfalls associated with incomplete or poorly written documents.
Craig has made various presentations to local, regional, and state-wide construction organizations on multiple topics such as business continuity, the Research and Development Tax Credit, changes in accounting pronouncements, and other topics related to the construction industry. Craig has also taught construction classes through U.C. Davis extension programs and the Construction Financial Management Association.
Noli Snobar serves as one of the BFBA’s technical reviewers, performing the final review of financial statements prior to issuance. He is also actively involved in developing training and continuing education courses for the Firm’s audit staff. He has developed various financial models to assist in guiding growth and financial stability, including income statement projections, cash flow forecasts, work-in-process templates and analytics for his client base.
Noli has a strong focus in the construction industry and has taught courses on construction accounting and GAAP Updates to various groups such as Construction Financial Management Association, Insurance Brokers & Agents of the West, the California Society of CPAs Sacramento Chapter, and various bonding and surety companies. He has also published construction focused articles with the Associated General Contractors (AGC) of California.
- Do Your Project Executives Need to Become Better Leaders? Book a 10-minute call with Eric Anderton (https://10minutes.youcanbook.me/)
- FREE Download off LLC Model: BFBA LLC Model (https://www.constructiongenius.com/bfba-llc-model)
- Get in touch with Noli Snobar (https://bfba.com/team/noli-snobar/)
- Get in touch with Craig Boyce (https://bfba.com/team/craig-boyce/)
Connect with me on LinkedIn. For more podcast episodes, you may also visit my website. Tune in and subscribe to the Construction Genius: A Leadership Master-Class Podcast on Apple Podcasts, Spotify, and Stitcher.
Thank you for tuning in!