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O P I N I O N
H as ownership transition taken a back seat at your firm over the years? Are your major owners baby boomers? Right now, ownership transition in the AEC industry is at an interesting intersection of firm-value and ownership-demographic. Starting early with your ownership transition planning provides ample time to position your staff and firm to maximize your firm’s value. Bring ownership transition into focus
With ages ranging from 57 to 75, baby boomers are a demographic that is collectively in various stages of executing their ownership transition. The next generation of owners, the 41- to 56-year- old Generation X demographic, includes many engineers who are in, or entering, their prime earning years. While this demographic has an increasingly stronger base of earnings, they will never match the peak number of baby boomers in the workforce. This demographic difference and the rapid rise in the value of many firms will impact certain ownership transitions. Of course, some firms are deep into the execution of a well-planned ownership transition and are successfully minimizing the impact of this generational phenomenon. They have next- generation owners who are committed to the
firm’s future, the leadership skills, and the means to invest financially in their firm. However, for selling owners who have done little – if any – transition planning, the impact on the number of sellers and next-generation buyers can be significant. The overall result is that owners who are late to the game need to cast a wide net when considering transition options. Here are a few basic steps to get your ownership transition on track: ❚ ❚ Understand how your firm is valued. Start with “spreadsheet calcs” using one or more of the metric- based plug-and-chug methods included in Zweig Group’s annual Valuation Survey Report . As you move further along, the use of a third- party valuation firm with expertise in the AEC
Brian Rice
See BRIAN RICE, page 4
THE ZWEIG LETTER NOVEMBER 15, 2021, ISSUE 1417
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