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STEVE MCADAMS, from page 1
dependency on any one client or industry segment. Integrating a diverse range of clients and markets into an annual revenue plan will safeguard against volatility, making diversified firms more attractive and valuable in the marketplace. CULTURE: THE INVISIBLE YET POWERFUL ASSET. Beyond financials and operational efficiencies, company culture plays a significant role in the success of an acquisition. A strong, positive culture fosters employee engagement, productivity, and overall job satisfaction, which in turn leads to lower turnover rates and higher efficiency. Culture is shaped by multiple factors, including leadership, communication, professional development, and the firm’s overarching vision. Firms that prioritize employee development through training, mentorship, and career advancement opportunities foster a loyal and motivated workforce. A clear strategic vision that is effectively communicated throughout the organization ensures alignment and commitment from employees at all levels. Firms with strong cultures are easier to integrate post-acquisition because their employees are engaged and invested in the company’s success. Buyers recognize the value of an established culture, as it often translates to a smoother transition and sustained performance post-merger. CONSISTENT BACKLOG: A PREDICTOR OF FUTURE REVENUE. The backlog of work under contract but not yet billed serves as a reliable indicator of future revenue and business stability. Firms that consistently maintain a strong backlog demonstrate an ability to secure new work regularly, ensuring predictable cash flow and sustained operations. Financial success isn’t just about meeting revenue targets; it also involves setting and achieving a monthly “new work” target. Firms that prioritize business development and maintain strong client relationships are better positioned to keep a steady backlog. A proven system to manage and achieve consistent backlog makes a firm highly attractive to potential buyers, as it reduces uncertainty and provides confidence in the firm’s future revenue streams. PROCESSES: TURNING POTENTIAL INTO PROFITABILITY. A well-defined process for converting backlog into revenue efficiently is essential for scalability and operational success. Firms that establish repeatable, trackable, and improvable processes can more easily facilitate expansion, pivot when necessary, and adopt new technologies seamlessly. The most effective processes are simple and manageable. Companies find success by starting with broad and simple systems that cover the mission critical operations such as project management workflows, client acquisition, or employee development. Initially Each process should have a clear purpose, be easily tracked and be able to be explained in less than five minutes. Complexity can be added, if necessary, once the process has been adopted with successful results. ELEVATING THE INDUSTRY THROUGH STRATEGIC FOCUS. Whether a firm is preparing for a future sale or simply looking to enhance its organic growth, focusing on these key areas – leadership development, client diversification, company culture, backlog consistency, and operational processes – will position it for long-term success. The more these factors are refined and embedded into standard operations, the more valuable and attractive the firm becomes to potential buyers. By honing these areas, firms not only elevate their own standing but also contribute to elevating industry standards as a whole. Ready to take the next step? Zweig Group’s M&A consulting team has helped hundreds of AEC firms explore, structure, and execute successful mergers, acquisitions, and sales. Whether you’re pursuing growth through acquisition or planning your exit strategy, our experts offer end-to-end support tailored to your goals. Learn more here. Steve McAdams, PE is a mergers and acquisitions advisor at Zweig Group. Contact him at smcadams@zweiggroup.com.
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THE ZWEIG LETTER JUNE 16, 2025, ISSUE 1590
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