CONSTRUCTION SUBCONTRACTOR EXIT PLANNING TIMELINE.
A clean exit from a commercial subcontractor business takes 36 months of structured work. Month 36 is the financial system installed, the owner on payroll, and personal expenses out. Month 24 is operations transitioned to the senior team and customer concentration reduced. Month 12 is the M&A advisor engaged, the confidential memo drafted, and bonding and banking transferability confirmed. Month 6 is indications of interest reviewed and a letter of intent negotiated. Compressed timelines reduce valuation by 20% to 40%.
The reason the runway is three years rather than one is arithmetic rather than caution. Buyers pull three years of monthly financials, so whatever the books look like in month 36 is what the buyer reads in diligence. If month 36 is the first clean month, the buyer sees a system that started recently and asks questions about everything before it. Every item on the timeline exists to put a specific piece of evidence in the buyer's file before they ask for it, which is why the order counts as much as the content does.
WHAT IT MEANS.
An exit planning timeline is the 36 month sequence a commercial subcontractor runs before a sale, with the financial system installed at month 36, operations transitioned at month 24, an advisor engaged at month 12, and a letter of intent negotiated at month 6.
WHAT HAPPENS WHEN.
Month 36, the financial system has to be in place
Three years before the intended sale the system a buyer will diligence has to already be running, not getting installed. That means books job costed with cost codes that mirror the estimating system, a monthly WIP schedule on a fixed cadence of the first Monday after the tenth, a 13 week cash flow forecast updated weekly, the owner on payroll at the revenue band appropriate salary with a $180K target at $12M, personal expenses fully separated from the business, and a P&L, balance sheet, and WIP that reconcile cleanly every month. Buyers pull three years of monthly financials, so if month 36 is the first clean month, the buyer sees a system that started recently and starts asking about everything before it.
Month 24, operations transition to the senior team
Two years out the owner steps back from daily operations, not entirely but meaningfully. A general manager or operations lead carries day to day decisions, PMs run jobs without the owner approving every change, and estimators win work without the owner pricing every bid. The owner's role becomes strategic: relationships with key GCs, capital allocation, and senior hiring. That serves two purposes, because the business has to be able to run without the owner and the buyer has to see historical evidence that it did. Customer concentration gets addressed here too, and the target is under 35% from any single customer by month 12.
Month 12, advisor engaged and memo drafted
An M&A advisor or broker who specializes in construction gets engaged to run the process, manage buyer outreach, and quarterback diligence, because buyers, multiples, and structures are different in this industry than in generic small business M&A. A confidential information memorandum gets drafted with the three year financial summary, growth trajectory, market position, key relationships, and owner transition plan, and it lives or dies on the financial discipline installed at month 36. Bonding and banking transferability gets confirmed with the agent and the bank, because some lines transfer cleanly and some need renegotiating. Personal tax and estate planning belongs here too, with the seller's CPA rather than with the M&A advisor.
Month 6, indications of interest, then letter of intent
Six months before closing the active sale process runs. Indications of interest come in from buyers who have read the memo, and the seller and advisor evaluate them on price, structure, cultural fit, and likelihood of close, with two to four typically advancing to management meetings. A letter of intent gets signed with one buyer, granting 60 to 90 days of exclusive diligence. The buyer's accountants pull historical financials, their attorneys review contracts, employment agreements, and customer concentration, and their bonding underwriter evaluates transferability. This is where every shortcut taken at month 36 becomes a problem. Closing happens at month zero, with the seller often staying 6 to 12 months in a consulting role.
WHAT IT LOOKS LIKE IN DOLLARS.
Sixty or more months of work supports 4.0x to 4.5x EBITDA. Twenty four months supports 3.5x to 4.0x. Twelve months supports 3.0x to 3.5x. Less than twelve months supports 2.0x to 3.0x. On a $1.7M EBITDA business the distance between 4.5x and 2.5x is $3.4M of valuation.
A verified marine client at $13.5M saw valuation move from $2.3M to $5.5M in 9 months once job costing, spend discipline, and per job reporting were in place. The revenue didn't change. The provable profit did.
A single GC above 40% of revenue is the threshold that worries buyers. The standard is under 35% from any single customer by month 12, ideally with no customer above 25%, and the diversification work needs 18 to 24 months to run.
THE MONTH 36 BUILD.
Cost codes mirror the estimating system so actual cost compares to bid cost line by line. That's the structure three years of clean monthly financials get built on, and it's the one item nobody can retrofit once diligence starts.
The WIP schedule goes out the first Monday after the tenth, every month, and the 13 week cash flow forecast gets updated weekly. Onboarding runs 60 days, which leaves 34 months of system operation before the sale conversation starts.
A revenue band appropriate salary, with a $180K target at $12M, and personal expenses fully separated from the business. Both exist to make reported profit mean what a buyer needs it to mean, and both are worth more the earlier they happen.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing, no payroll, and no add-ons.
| Last 12 months revenue | Monthly fee |
|---|---|
| Up to $1M | $1,900 to $2,900 |
| $1M to $3.5M | $2,600 to $3,900 |
| $3.5M to $6.5M | $3,800 to $5,700 |
| $6.5M to $9.5M | $5,100 to $7,100 |
| $9.5M to $12.5M | $6,100 to $8,500 |
| $12.5M to $15.5M | $7,400 to $11,000 |
| $15.5M to $18.5M | $9,400 to $13,500 |
| $18.5M+ | Quoted individually |
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions rather than a report.
Your bookkeeper keeps doing the books.
You stop touching the books.
Everything in Core, and we run the bookkeeping and the controllership as well. Nobody in your office is answering coding questions or chasing a reconciliation at month end.
We do the books. No payroll.
Every job shows its margin while it's still running.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the job costing.
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