The metal construction and heavy construction sectors are experiencing a wave of interest from strategic buyers and private equity firms. Driven by substantial backlogs, geographic expansion opportunities, and ongoing industry consolidation, many business owners receive unsolicited calls asking, “Are you open to selling?”
At the same time, inflation, rising labor costs, uncertain trade policies, and shifting input prices put pressure on profit margins—and on owners to make wise decisions.
Amid these complex business dynamics, many owners overlook a crucial piece: their financial planning.
Whether considering a sale, eyeing internal succession, or simply reinvesting to grow and stay competitive, aligning your personal wealth strategy with your business plans can give you greater clarity, leverage, and peace of mind.
Five financial planning questions for metal construction business owners
Can you afford to walk away?
Before making informed decisions about selling or transitioning your business, you need a clear picture of your financial independence—whether your wealth outside the industry is enough to support your lifestyle without relying on the company.
This is a critical and often overlooked question. Business owners in the construction space frequently have a sizable portion of their net worth tied up in their company, sometimes without even realizing it. They may have a profitable business, but do they have sufficient after-tax, liquid assets to retire, launch their next venture, or pursue a passion project?
Understanding what is truly needed to achieve financial security helps to evaluate offers clearly and prevents business owners from selling too early, too late, or on the wrong terms. It also provides valuable insight into how much capital to reinvest into the business or set aside for future generations.
Are you prepared for how buyers are structuring deals?
Uncertainty is driving changes in how deals get done. Labor challenges, fluctuating material costs, tariffs, and project-based revenue streams have made buyers more cautious, especially in construction-related industries. As a result, more transactions include structures like:
- Earnouts: You may agree to a purchase price but only receive part of it upfront. The rest is contingent on future business performance. This keeps you involved post-sale and provides the buyer with some downside protection in case profitability dips.
- Indemnifications: A portion of the proceeds might be held in escrow, protecting the buyer if undisclosed liabilities, customer disputes, or tax issues emerge after the transaction.
- Rollover equity: Sellers are often asked to reinvest a percentage of their proceeds back into the business under new ownership. It helps align interests, extends your exposure, and shifts liquidity further into the future.
If you need every last dollar from the transaction to meet your financial goals, these structures might not work for you. On the other hand, if you have already reached financial independence, you may have the flexibility to accept these terms and potentially benefit from them.
Are your personal and business finances properly separated?
Many long-time construction business owners have intertwined personal and business finances. It is common to see vehicles, insurance, real estate, or family members’ salaries run through the company. While this may have worked for years, it may become an obstacle during a sale or when executing a succession plan.
Buyers, especially institutional ones, expect clean books. If your financials are opaque, you risk lower valuations, tougher negotiations, and longer diligence timelines.
But even if you are not selling soon, separating personal and business finances is a smart move. In the context of personal planning, it gives you a clearer view of what you need personally to support your lifestyle separate from the business, and that clarity better informs estate and succession planning strategies.
Are you taking advantage of estate planning opportunities?
If your business and personal assets combined put your net worth near or above $15 million (or $30 million for married couples), you are in a critical window for estate tax planning. Additionally—and this is key—wealth transfer strategies are far more effective when implemented before a business is sold or its value spikes significantly.
Using tools like irrevocable trusts, gifting strategies, and valuation discounts, you can shift appreciation and ownership to the next generation or charitable vehicles while minimizing tax exposure. Waiting until after a transaction occurs could mean exposing your family to a much larger estate tax bill.
Owners may miss this window when focusing solely on the deal, only to discover after the fact that they could have protected millions in generational wealth with estate planning.
Are you prepared for the implications of business sales taxes?
A business sale often results in the single biggest tax year of your life. The impact can be significant and will vary widely depending on deal terms. This means the final negotiated details beyond the top-line number lead to differing degrees of capital gain (taxed at lower rates), ordinary income (taxed at higher marginal rates), and, if included, real estate-related tax like depreciation recapture.
A few key strategies to consider with your CPA and financial advisor:
- Timing charitable gifts or contributions to donor-advised funds.
- Offsetting gains with carry-forward losses or strategic deductions.
- Taking advantage of installment sale treatment if appropriate.
- Ensuring proper structure on equity rolled into the new deal to defer the associated gain
- Pre-loading retirement contributions and/or deferred compensation plans.
The personal side of the business equation
You have worked hard to build something of value—not just a business, but a legacy. As the pace of deal activity heats up and industry dynamics continue to shift, do not let your personal finances become an afterthought.
Whether you are years away from selling or considering an offer right now, taking the time to assess your financial goals, clean up your books, and engage the right advisors can help you move forward with clarity and confidence.
David Stahl is a wealth management partner at Plante Moran Financial Advisors, where he provides personal financial advisory services to closely held business owners and private equity professionals. He can be reached at david.stahl@plantemoran.com.
