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A&E Firm Succession Planning: Get Your Firm Ready for Valuation
A&E firm succession planning starts years before a buyer or a valuation firm opens your books. Next Phase A&E gets owner-led architecture, engineering and design firms ready for an internal or external transition, at a fixed fee, through The Next Phase Method.
Buyers and valuators discount what they cannot verify. Messy books, a WIP number nobody agrees on and a firm that stops when you leave all pull the value down. Most owners find these gaps after the valuation, when the time to fix them is gone.
Request a meeting. In one free call, we'll show you which gaps a valuator will see first.
What Buyers and Valuators Look For
Financial statements: three years in consistent categories, closed every month
WIP and backlog: numbers your CPA agrees with and a buyer can trace to projects
Receivables: an aging report by client, and how much revenue rests on one or two clients
Owner dependence: who prices, approves and brings in work when you are gone
Written procedures: billing, change orders and reporting your staff run, with named backups
Contracts: signed agreements and scopes on file for active projects
In the 2020 ACEC and FMI ownership transition study, only about half of firms with fewer than 50 employees had a formal ownership transfer plan. Starting three to five years out gives you time to build one on clean records.
Problems We Fix Before the Valuation
The problem
What a valuator sees
What we build
You approve every price and invoice
Key-person risk
Delegated approval rules and trained process owners
Expense categories change from year to year
Numbers that do not compare
One chart of accounts and a monthly close routine
WIP means something different each month
Earnings nobody trusts
One written WIP definition agreed with your CPA
Procedures live in your head
A firm that leaves with you
Written SOPs with named backups
Project data spread across spreadsheets
Weak evidence of backlog
One register for status, backlog and billing
Internal or External Transition
Internal: partners or key employees buy in over several years. They need processes they run themselves and numbers they trust before they sign a note.
External: a buyer or merger partner runs due diligence on a deadline. Organized records shorten it and leave fewer surprises to negotiate.
How The Next Phase Method Applies
Schematic Design: a readiness review of your records and processes against what a valuator asks for, with ranked gaps and options. See the A&E firm diagnostic.
Design Development: we build the fix for the top gap, such as a consistent chart of accounts or a WIP and backlog register.
Construction Documents: written procedures, a trained backup and a readiness file of organized, client-approved records.
Post-Occupancy: we re-measure your numbers 90 days later, before the valuation date.
What We Do Not Do
We do not value your firm, set a price, broker a sale or represent either side. Your valuation firm, CPA and attorney handle those. We share your records with them only with your written approval.
For a general checklist on selling a business, see the SBA guide to closing or selling your business.
Start Here
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Frequently Asked Questions
What is A&E firm succession planning?
The work of preparing an architecture, engineering or design firm for a change in ownership, inside the firm or to an outside buyer. Next Phase A&E handles the readiness side: records, procedures and a team that runs without the owner.
Do you value my firm?
No. Next Phase A&E does not perform valuations. We get your firm ready for one, then your valuation firm sets the value.
What raises an engineering firm valuation?
Valuators weigh risk. Verifiable financials, steady backlog, a spread of clients and a team that runs without the owner lower the risk they price in. We cannot promise any change in value.
When should I start?
Three to five years before the transition gives you time to fix gaps and show a record of the fixes working. A year out still helps.
Does this work for an internal transition?
Yes. Partners and key employees buying in need the same clean numbers and written procedures as an outside buyer.
Do you work with my valuation firm, CPA or attorney?
Yes, with your written approval. We hand them a readiness file of organized records and answer their questions about your processes.
How is transition readiness priced?
Each phase carries a fixed fee for the agreed scope, stated in a written proposal you approve before work begins. Pre-Design carries no fee.