Growth, Transition, & Exit Strategy - Architecture, Engineering and Construction Firms
Anchin provides a holistic suite of integrated services for Architecture, Engineering, and Construction firm owners who want to optimize their businesses for growth, transition, and/or owner’s exit or liquidity event, based on their needs and goals. While these objectives are distinct, they are often inextricably interconnected. ith ninety-five years of dedicated service to the Architecture, Engineering, and Construction industries, Anchin is uniquely qualified to deliver such services.
Why Plan Ahead?
We had a recent Q&A with Brian Kenet, MBA, a senior business advisor at Anchin who advises architecture, engineering, environmental, and construction (A/E/C) firms on growth, transition, and exit strategies.
Brian spoke with us about why companies need to consider planning ahead.
- What are my best options for profitable growth – organic or via acquiring other firms?
- Some avenues for growth better lend themselves to a “one or the other” approach. However, frequently it is not a question of ‘either or’ but rather how can a strategic acquisition spark organic growth, or address other firm needs, such as bringing in new, entrepreneurial leadership talent into the firm.
- How do I make sure my firm’s organization and financial controls keep pace with the growth and maturation of my business?
- As firms grow and mature, as their leaders age, and as the competitive marketplace evolves, the organizational features of the firm that ‘worked’ up to the present may not work going forward. Typically, with greater scale, comes greater complexity, and a correspondingly greater need for more formally designed and implemented systems for financial control and risk management.
- What is my firm worth? How do I maximize its value? How do I optimize my firm for profitability and positive cash flow?
- Whether in an M&A or internal transition context, the ‘realizable’ value of an A/E/C firm is very closely tied to its ‘sustainable’ ability to generate profits and positive cash flow. Profitability and cash flow in A/E/C firms are highly sensitive to a small handful of operating factors. Identifying these factors, and understanding how to optimize them, is the first step to more robust finances and their corresponding rewards and benefits.
- How can my firm attract, retain, develop and incentivize the talent it needs to preserve its success on a long-term, sustainable basis?
- Many firm leaders respond to the career aspirations of their ‘key’ employees, often defined as ‘mid-career’ professionals, in a fundamentally reactive and ad-hoc manner. Successful talent retention strategies for key employees require the ‘design’ of incentives that simultaneously resonate with their professional aspirations and incentivize them to behave in ways that further the interests of the firm.
- Should I sell my firm to a third party or transition internally – and what do I need to do to prepare for one scenario or another?
- The good news is that what one needs to do to both maximize value and maximize one’s ‘options’ are the same, regardless of whether one is preparing for external or internal sale: focus on articulating and embedding a coherent set of values and guiding principles; focus on sustainability of earnings, cash-flow, and growth; and focus on nurturing the next generation of firm leaders. Moreover, it isn’t always an ‘either or’ situation. Many firms start with bringing into the ownership a small group of key ‘future’ leaders, building up their capabilities, and then selling to a third party. Having the ‘next generation in place, properly trained, and incentivized to support an external sale, and/or being financially capable to participate in an internal sale, makes the firm more valuable under any transition scenario
- Planning – Identifying and evaluating strategic alternatives – succession planning. Buy? Sell? Merge? Tax planning & structuring.
- Managing Growth – Operating margin & cash-flow optimization, financial reporting & controls.
- Key Employee Compensation, Retention, Leadership Development Plans & Programs – Incentive compensation, profit sharing, and equity participation, retirement plans (qualified and unqualified), professional development and mentoring.
- Exit Strategies – Sell-side and buy-side representation, internal transactions, valuation, & deal structuring, due diligence, tax mitigation planning & strategy.
- Private Client Services for Owners – Trusts & estates, tax planning, retirement planning, family office services.