A solid succession plan keeps the business running and the team supported long after the owner steps away. Whether you’re planning to retire, sell, or step back, you need a clear plan that protects your crew, your customers, and everything you’ve built.

Here’s how you can approach succession without leaving anyone behind.

Start Planning Early 

Building a strong succession plan takes time, ideally two to five years. That gives you room to bring in the right experts: a CPA, a business banker, an attorney, and a wealth advisor. 

This team helps you figure out the best way to exit, whether you're selling outright, keeping it in the family, or setting up something like an Employee Stock Ownership Plan (ESOP).

You’ll need to think about ownership transfer, tax implications, loan responsibilities, and how to handle the cash when it comes. 

Know Your Exit Options

There are several ways contractors can step away. Some are more traditional, others are gaining ground in the industry. Here's a quick breakdown:

• Sell to a strategic buyer: A competitor or related business takes over operations, often aiming to expand their reach or streamline services.
• Sell to a financial buyer: A private investor or group purchases the company purely as an investment, typically with no industry ties.
• Sell to your leadership team: Trusted managers pool resources to take ownership, keeping continuity in both leadership and operations.
• Establish an ESOP: You set up an employee stock ownership plan that gradually shifts the company into the hands of your workforce.
• Step away from daily operations: You retain ownership or a stake in the business while handing day-to-day decisions to a new team.
• Shut down and liquidate: If a sale or transition isn’t feasible, you close out the business and sell off remaining assets.

Each one has different impacts on your legacy, your team, and your long-term finances. Some, like an ESOP, require very specific conditions to work.

Is an ESOP the Right Fit?

An ESOP helps protect the company’s culture, rewards your team, and can even offer tax advantages. Plus, it gives workers a real stake in the company’s future. An ESOP works best if you have: 

• A strong management team: You need leaders in place who can run the business without you. If all the knowledge and authority lives with one person, an ESOP’s going to struggle.
• Consistent earnings: Construction has its ups and downs, but ESOPs need steady financials year over year to keep things healthy. That consistency supports valuation, debt service, and long-term viability.

With these in place, an ESOP can be a reliable way to transition ownership while keeping the company stable and your crew invested for the long haul.

Think Beyond the Payday

Selling or stepping away is both a business decision and a personal milestone. You’ve invested years into building your company, and now the focus shifts to what comes next—for you, your employees, and the reputation you’ve built.

Set your priorities early. Know what matters most to you, like legacy, cash, team loyalty, or continuity. Then build the plan that gets you there.