Industry/ Sector |
Construction |
Category |
Growth, Scale, Succession and Exit Valuation, Strategic Planning |
Brief |
Develope a growth strategy in preparation for a 3 year exit. |
Challenges
Heavily regulated sector, strict license control limiting rapid growth and restricting potential buyers
Strategy
Growth – A business review found that operating levels were high and capacity was limiting growth more than the owners realised. Capability was the second growth priority with limited non-technical skills existing outside of owners.
Exit – we undertook market research into potential acquirers but found more opportunities internally. A strategy was put in place to bring forward the exit plan to accommodate phased vendor finance for a management buyout.
Action
Immediate steps to increase capacity through – automation of basic tasks, an outsourcing and contractor model developed. A price increase was applied to the bottom 20% of projects which was the most undesirable work for the team.
A Product Architecture strategy was implemented to build a premium product into the offering and source new clients into that space.
A program and supporting system was built to work on capability growth for all team members including management and support staff. The owner was progressively removed from day-to-day operations and a junior partner took responsibility for business development.
Encite was also engaged by the buying entity to coach and support the new leadership team once the transaction was complete.
Outcomes
- Achieved 85% growth in turnover over an 18-month period
- Owners exited 18 months ahead of their 3-year plan
- New owners reengaged Encite to coach the new team to continued growth
- Another successful transaction with a new partner 14 months later