Linamar Corporation's Skyjack division recently launched its fully revamped website www.skyjack.com. The new portal was designed with a combination of new technology, international audiences, and mobile first roles in mind.
5 tips to streamline succession planning for your construction business
Succession planning is an important and potentially complicated process that can seem daunting for construction company owners, their families and their colleagues and employees.
But with appropriate foresight, strategic planning and execution, construction owners can position themselves for a strong financial situation in retirement, while also maximizing the future of their organizations and their legacies.
Mike Africk, Principal of CliftonLarsonAllen's Oak Brook, Illinois operation, and Emily Gunther, Principal of CLA's Philadelphia office, both of whom have decades of experience in succession planning for construction companies, talk through the five most important tips for approaching the succession planning process, no matter what point you're at in your career.
1. It's Never Too Early to Start
Regardless of your age or the maturity of your business, as soon as the thought of retirement, succession, or how you'd like to frame your legacy and the future of your business, you should start to set a plan in motion.
The changing dynamics of the construction industry and the economy can play critical roles in the overall valuation of a construction company, so it's critical for your advisors to understand every detail that could impact your financial and organizational future.
"We need to have the time to make it all work," Africk said. "Whether it's an internal or an external succession event, certainly it's never too early to start the process."
Your succession planner will need to thoroughly understand the specific industry or niche your company operates in, and how that relates to your financial statements, structure and what impact those elements have on the overall valuation of your company. At a minimum, the experts at CLA recommend a five-year minimum for developing and executing a succession plan.
But starting early doesn't just mean engaging in the succession process. It also applies to how you approach the design, structure and culture-building of your company in the near-term.
2. Build for Success(ion) Now
With over decades of experience in the succession planning sphere, Africk and Gunther agree that one of the most challenging things for construction owners to build is their own organization.
Too often, organizations are reliant on a single figurehead to maintain a steady stream of business, to forge important development relationships and to ensure the company is on solid footing for years to come.
The top factor in ensuring a successful succession, Gunther said, is making sure that construction owners are investing in the people around them by developing a deep bench of leadership talent that can serve as the lifeblood of an organization after their departure, or after their retirement.
"Value is built, and a great succession event is built, if you have a solid team behind you," Gunther said. "Do you have a depth chart? Do you train your people? Are you hiring the best of class? Those are all important questions that you need to answer."
That process starts with disseminating institutional knowledge from the top down. In the case of an acquisition, if the departing business owner holds the keys to all of the relationships and all of the historical knowledge, how valuable – really – is the company as a whole, Africk says.
"It really is important to teach your people what you know and let them run the company, because if somebody's going to buy it and you're not going to be there, what really are they buying?"
3. Incentivize Your Organization
To gain buy-in from your team, it's important that they feel incentivized. That could be financial but doesn't have to be. Incentivization could come in the form of increased responsibility, leading to a greater sense of importance for the organization; the empowerment of people to make their own decisions, allowing them to leave their mark of influence on the company; or recognizing talent and investing in them to be the future leaders of the company. People are motivated by a lot of different things, Gunther says.
Those mentioned above are all examples of creating a culture that shows that you care not only about the current and future success of the organization, but in helping colleagues become the best, most valuable versions of themselves through incentivization and empowerment.
4. Understand Your Goals
This element is more difficult to pinpoint, Africk and Gunther agree, because in many cases a final succession goal does not become clear until the planning process begins. But there should be significant thought given beforehand, even if it's not conclusive.
To gain clarity on what your succession goals might look like, here are some questions you can ask yourself:
- How does your family's next generation fit into your succession plan? Is that important?
- Do you want to ensure the company continues to operate as it currently does, or are you comfortable with an acquisition?
- How do you feel about an Employee Stock Ownership Program (ESOP) and is that a format you may consider?
- What do you want your legacy to be?
"Different owners have different goals, and depending on what each owner's goals are, really understanding what the succession looks like to them is really important," Africk said. "Really sitting down and figuring out what the owner's goals and dreams are help formulate the overall succession plan."
5. Work With a Specialized Planner
Finally, work with a succession planner who understands you, your business and the construction industry. There are so many factors that contribute to a successful succession execution that without appropriate partners, construction business owners can be left foundering.
One of the major pieces of that is in the valuation process. How does the company value fit into your personal financial plan? Is your ability to retire based solely on the value of the company?
"You must have a realistic valuation or metrics that you're using to really determine the value of the company and how you can turn that into cash," Gunther said.
"Is it going to be all cash upfront? Are you willing to hold a note? Is there real estate that you own where you might have some other source of income? Is the rent really going to match their value currently?
"Cash is king, and so it's really critical to understanding the finances for a succession event."
More from Industry News
Shawmut Equipment of Canada, one of Manitowoc Crane's dealer partners for success in North America, has opened a new facility in Elmsdale, near Halifax in Nova Scotia. The new location will serve as the company's Canadian headquarters, and comes as demand for its products and services has been constantly expanding in the region.
The Toro Company is realigning the organizational structure for its underground construction businesses to better serve customers, maximize synergies and streamline costs. The company intends to combine certain aspects of the Ditch Witch, American Augers and Trencor businesses, all of which were part of the Charles Machine Works acquisition announced earlier this year. This realignment supports a streamlined approach to the marketing, sales and service functions of those businesses to more effectively support end customer needs.
Komatsu America has introduced the 354-horsepower D155AX-8 LGP (low ground pressure) dozer which incorporates proven Komatsu technology used in the D155AX-8, enhanced with two blade options and more track on the ground. With 12% wider track gauge, 9% longer track on ground and 47% lower ground pressure than the standard model, the D155AX-8 LGP offers improved performance, flotation and stability.
Gryphon Investors, a San Francisco-based middle-market private equity firm, has signed a definitive agreement to make a significant investment in Mechanix Wear, a leading designer and manufacturer of high-performance work gloves. Working alongside current owner and CEO Michael Hale, who will retain an ownership stake in the Company, Gryphon intends to build a leading platform in the Personal Protective Equipment (PPE) sector. The transaction, which is expected to close in the fourth quarter, is subject to customary closing conditions. Terms of the deal were not disclosed.
The new five-year forecast from the American Rental Association (ARA) updated in August calls for equipment and event rental revenues in North America to surpass $71 billion in 2023, including $64.7 billion in the United States and $6.4 billion in Canada. The latest forecast is ARA's first to project rental revenue for 2023. The current figures, which are updated quarterly, also project slightly less growth for 2019 through 2022 than what was forecast in May. "The market for the equipment and event rental industry remains positive, but there definitely are signs that the U.S. economic growth is slowing and this projected slowdown is reflected in our latest forecast," says John McClelland, Ph.D., ARA vice president for government affairs and chief economist.
Caterpillar enlists Mike Rowe to host a fake game show quizzing the experts on frequently asked questions about Caterpillar services and products.
Mack Trucks dealer Kriete Truck Centers invested $6 million in a new building at its location in Racine, Wisconsin, doubling the amount of service bays at the facility. The Mack Certified Uptime Dealer location will also add a mezzanine in October to double its parts warehouse capacity.
Bomag Americas, Inc. has appointed Matt Nelson as director of dealer sales, West Region and Canada. In this position, Nelson will be responsible for the overall sales leadership, support and development of Bomag's distribution and field sales team in the Western U.S. and the entire country of Canada.
CONEXPO-CON/AGG and IFPE 2020 offering education sessions on industry trends, technologies and solutions to boost your business
Education is always a vital component of both CONEXPO-CON/AGG and IFPE to help attendees not only survive, but thrive in a changing and global industry.
FLO Components Ltd. is representing Macnaught in Ontario and Manitoba. Macnaught has been a manufacturer of grease, oil and fuel equipment, hose reels and positive displacement flow meters for the agricultural, automotive, industrial, mining and transport industries across the globe, since 1948.
Over the course of three years and many challenges of nerve and knowledge, more than 3,200 technicians from across the globe are whittled down to a team of just three victors. As a test of grit, stamina and teamwork, there is nothing else that compares to Volvo CE's Masters Competition.
Takeuchi-Mfg. announced leadership changes at the annual shareholders meeting in May. Founder and President Mr. Akio Takeuchi has stepped down, and his son, Mr. Toshiya Takeuchi, will now serve as president of Takeuchi. He is the second president in the history of Takeuchi Manufacturing.
Brokk has hired John-Paul Duquette as regional sales manager for central Canada. Duquette manages sales for Brokk robotic demolition machines and provides support for new and existing customers throughout Ontario, Manitoba and Saskatchewan.
Superior Industries, Inc., the U.S. based manufacturer and global supplier of bulk material processing and handling systems, has announced a new partnership with Canada's largest distributor of conveyor belting, components and other bulk material handling solutions. Belterra, a 50-year-old distributor with 19 locations throughout the country, will stock, sell and service Superior's conveyor idlers, pulleys, scrapers and accessories in Quebec.
Bridgestone Americas, Inc.'s off-the-road (OTR) tire plant in Bloomington, Illinois, was recently recertified for continued participation in the Illinois Occupational Safety and Health Administration's (OSHA) Voluntary Protection Program as a Star participant. The program is part of the U.S. Department of Labor's OSHA Voluntary Protection Program (VPP).
Minnich Manufacturing selected as vendor partner of Associated Construction Distributors International, Inc. (ACDI)
Minnich Manufacturing has been selected as a vendor partner of Associated Construction Distributors International, Inc. (ACDI). ACDI is a co-operative association of independently owned and locally operated distributors of specialty construction products and equipment. The organization offers members information on business and industry trends, training, fellowship, manufacturer-ready access for products, and more. ACDI distributors account for more than $1 billion in the sale of materials and equipment to the construction industry.
Within two months, Terex Aerial Work Platforms (AWP) Changzhou plant will celebrate the production of the 1,000th Genie GS-1330m scissor lift, introduced globally in early 2019, manufactured in the factory. This milestone is a testament to the great success of the facility's production capabilities in China and shows the brand's capacity to ramp-up production to meet high global demand for this product.
Hyundai Construction Equipment Americas, Inc. has added Scott Morrish to the Finance team. He will report to Mr. K.S.Seo, CFO of Hyundai Construction Equipment Americas, Inc.
Stellar Industries, Inc. has added Tim Worman to its team. Worman will be responsible for the planning, organizing and controlling of the hook lift, cable hoist and American Eagle accessory product lines from conceptual stages through product life cycles to optimize profit and meet marketing, financial, and corporate growth objectives.
Komatsu America Corp. has been awarded a national cooperative contract for heavy construction equipment and related accessories, attachments and supplies by Sourcewell (formerly the National Joint Powers Alliance).
Strongco Corporation has reported financial results for the second quarter ended June 30, 2019, showing growth in profits and six profitable quarters overall thus far.
DEUTZ, one of the world's leading manufacturers of innovative drive systems, again delivered a positive business performance in the first half of 2019.
Tadano Ltd. completed its $215 million acquisition of the Demag Mobile Cranes business on August 1. The transaction brings together two of the top names in the lifting equipment industry - each well known for safety, quality, innovation, and performance. The Tadano and Demag brands now leverage a long combined history of manufacturing and lifting experience. Working together, we will push forward, innovate, and contribute to the success of our customers worldwide.
Mammoet has announced its intentions to acquire ALE. Both companies are specialists in engineered heavy lifting and transport for sectors such as the petrochemical industry, renewable energy, power generation, civil construction and the offshore industry.
Registration is now open for the Volvo 2019–2020 Road Institute, the paving industry's premier operator and technician training program. Courses run November 2019 through May 2020 and offer a mix of classroom and hands-on training on a variety of operations and maintenance topics.
Takeuchi-US has hired Jeremy Lindsay to fill the regional manager position, effective immediately. In this role, he will be responsible for all sales development and activity within Alaska and Canada. His additional responsibilities include visiting assigned dealers throughout the region to oversee company business and assets while strengthening dealer relationships.
Two JCB apprentices won first place in the mechatronics division at the recent SkillsUSA national championships. Anthony Smith and Victor De La Cruz were tested in practical skills in pneumatic technology, electrical systems, mechanical systems and general automation techniques. Smith and De La Cruz now have the opportunity to compete in the WorldSkills championships held in Shanghai in the Fall of 2021.
Telsmith, Inc., a manufacturer of mineral processing equipment, is pleased to announce Pacific Rock and Recycle Equipment Company as a manufacturers' representative for the entire product line of aggregate and mining process equipment.
Alliance Parts expands offering of products, retail locations to create one-stop solution for Daimler customers
With the recent addition of new retail locations and more value-based parts to its portfolio, Alliance Parts is fulfilling Daimler Trucks North America (DTNA)'s vision of a one-stop solution, to provide exceptional customer experiences and parts to customers when and where they need them. The growing parts portfolio, increasing retail footprint and ability to deliver parts in 24 hours or less will benefit customer uptime.
LiuGong NA has appointed Paul Cranage as its senior manager of Sales & Business Development. Working from LiuGong NA headquarters in Katy, Texas, Cranage is in charge of new dealer recruitment and training, LiuGong's dealer portal initiative and industry and performance reporting.
Manitowoc is launching a new apprenticeship program to help certify welders in Pennsylvania. This new program follows recent approval from the state of Pennsylvania Department of Labor. The company expects to have the program up and running in August of this year. The move reflects the company's commitment to further building the U.S. skilled workforce.
Equipment Source Inc. (ESI) JCB is the newest addition to the growing JCB dealer network in North America. The new JCB dealer sells and services a full range of JCB construction machines – including excavators, skid-steer and compact track loaders, and telehandlers – from locations in Anchorage and Fairbanks.
SMS Equipment is streamlining customer experience with a fresh new website.
United Rentals, Inc. has announced financial results for the second quarter of 20191.
Market growth in Europe and North America has helped Volvo Construction Equipment deliver solid sales, earnings and delivery improvements during Q2 of 2019.