Construction Today - December 2009 - (Page 232)
CONSTRUCTION COACH Residential Patrick F. McNally, MBA, CPA, ABV, CFF, is partner in charge of corporate finance consulting for Blackman Kallick in Chicago. Contact him at 312-980-2934 or email@example.com Thinking about retirement? Experts say to start preparing now before it’s too late. BY PATRICK F. MCNALLY Make Your r Next, look carefully at your business. Are there improvements you can make to cash flow? Be sure you are staffed as lean as you should be. Be certain inventory is not bloated and you are buying as cheaply as you can. Also, look at your assets. Are there assets on your books that you do not need? Get rid of them. Not only will you immediately realize cash, but you will also reduce the level of assets seemingly necessary to run the business. This can improve the value of the business in the eyes of a buyer. Look at your miscellaneous expenses. Should your spouse who hasn’t seen the inside of your office in years be on the payroll? Is all of the travel and entertainment expense on your income statement necessary? Trim expenses now. However, buyers might be skeptical of recent changes. Be prepared to demonstrate that the changes are positive for the business in the long term. The sooner you make the changes the better as there will be a longer period of time for the buyer to see that the changes are not short-term fixes detrimental to the long-term health of the business. In This Section 234 Amcon: The Beasley 238 Dietze Construction 241 Polimeni 244 Greenpark Homes 246 Kite Realty Group s you were building your business, you focused on its growth and day-to-day issues. You occasionally thought about retirement. You might even have taken some concrete steps, such as remodeling your vacation home so that you could make it your full-time home once you retire. At work, however, you never thought about what steps you should take to prepare your business for your retirement. You thought one of your children might take over, but you never discussed it with any of them. Now, your older children are established in their own careers and your youngest child started law school. Your dreams of passing the business to your children just ended. You are 63 and want to retire. However, your only transition plan became unworkable when your youngest entered law school. To maximize value when you retire, you and your business must be ready and the market has to be right. While it is best to prepare years in advance – some things need to be done 10 years in advance – you might not need to wait to retire. But you need to take action now to minimize the effect on your retirement. What’s Your Business Worth? First, you need to know the value of your business. Hire a professional who can tell you what your business is worth in the current market. He can also examine whether there are things you can do to improve the value of your business. If you find that you can make improvements to substantially increase the value of your business, you might consider delaying your retirement to implement those improvements. You also need to determine how much you truly need for retirement. While rules of thumb, online calculators and other quick and dirty methods of estimating your retirement needs can be helpful in planning, you should consider hiring a personal financial planner who can help you examine your needs in detail. You might find that you need more than you thought. Better to discover that now rather than after you have retired. Alternatively, you might determine that your retirement needs are less and your business is worth more than you thought, and you are well situated to retire now. Lock in Key Employees Buyers are often concerned about how a business will run once the owner, who presumably was instrumental in its success, leaves. Is your management team strong? If it is, do they have employment and non-compete agreements? While it might be costly to get employees to sign agreements, a buyer’s increased confidence that the business will operate profitably once you have retired can result in an increase in your business’s value. You Can’t Control the Market While you can do things to improve the value of your business, you cannot affect the market CONSTRUCTION-TODAY.COM DECEMBER 2009
Table of Contents for the Digital Edition of Construction Today - December 2009
Construction Today - December 2009
2010 Construction Forecast
Product Showcase: Hand Tools
F&R Construction Group Inc.
Suffolk Construction: Met 2
Weitz Co.: Solaris at Crossroads
Chance Construction Co.
Allied Building Products Corp.
Bird Construction Co. Inc.: Condado Vanderbilt Hotel
Broccolini Construction Inc.: EDC Headquarters
CJ Pink Ltd.
Cobra Corporate Management Inc.
DDRM: The St. Regis Deer Crest Resort
T.N. Ward Co.
EllisDon: North Park Quad Pad Arena
Blumenfeld Development Group & Forrest City Ratner – East River Plaza
Clark Construction: Michigan International Speedway
Morton Buildings Inc.
Triangle Associates Inc.: The Gallery on Fulton
Vogel Bros. Building Co.
Walsh Construction: Mercy Corps.
Wasatch Advantage Group: San Tropez
John W. Danforth Co.
Shore Environmental LLC
American Civil Constructors Inc.
Archer Western: I-75/I-475 Reconstruction
Cleland Site Prep Inc.
Delaware DOT: Indian River Inlet Bridge
Goodfellow Bros. Inc.
International Construction Equipment Inc.
Kiewit Pacific Co.: SR 519 – Seattle Intermodal Access Project
Plaza Construction Corp.
B. Gottardo Construction Ltd.
Bergmann Associates: Walkway Over The Hudson
Craig Olden Inc.
G.M. Sipes Construction Inc.
Idaho Sand & Gravel Co.: Ten- Mile Interchange
Malcom Drilling Co. Inc.
Mid Eastern Buildings Inc.: Southampton Wastewater Treatment Plant
Minnesota Department of Transportation: I35W Crosstown/ Urban Partnership
Nicholson Construction Co.
Papich Construction Co. Inc.: Route 46 Expansion Project
Tilcon New York Inc.: Interstate
Tyam Excavation and Shoring Ltd.
W.C. English Inc.: U.S. 321
West Electric Corp.
Turner Construction Co.: Eastern High School
Gafcon Inc.: Carlsbad High School Modernization Project
DASNY: Gouverneur Healthcare Services
Stuart Olson: University of Lethbridge Markin Hall
University of Houston Student Housing
HDR Architecture Inc.
Marshall-Lee Construction Corp.
RA-LIN & Associates
Suffolk Construction: Boston Renaissance Charter School
Suffolk Construction: FIU School of International and Public Affairs
Tower Construction: Huntington Memorial Hospital expansion
Absher Construction Co.: Chief Sealth High School and Denny International Middle School
Casey Middle School
Cedar Ridge High School
Clark: Lowell Reception Center
Gilbane/Banks Joint Venture: Coppin State University
Hensel Phelps Construction Co.: FORSCOM/USARC New Headquarters
Shaw Construction: Mesa State College Student Center
Shiel Sexton: Butler University
SpawGlass Contractors Inc.: Austin Community College Rio Grande Campus Parking Garage
Stuart Olson: New Edmonton Remand Centre
The Christman Co.
Turner Construction Co
Weddle Construction Ltd.
Kite Realty Group Trust: Eddy Street Commons at NotreDame
Last Look: DANSY
Construction Today - December 2009