The difference between a successful ownership transition and a failed one often comes down to preparation. Most AEC firm leaders underestimate the complexity and timeline required for a smooth transition, starting the process too late and missing critical steps that protect firm value, retain key talent, and ensure business continuity.

This streamlined checklist distills the essential pre-process tasks you must complete 12-24 months before any ownership change. Whether you're planning an internal succession, external sale, or ESOP transition, these 20 items form the foundation for preserving what you've built while positioning your firm for its next chapter. Don't wait until you're ready to exit: start preparing now!

Valuation & Financial (12-24 months Before)

Understanding your firm's true worth is the cornerstone of any ownership transition. A professional valuation not only establishes a defensible price but also identifies financial weaknesses that could derail the transition. Clean financials and realistic expectations set the stage for productive negotiations and sustainable deal structures.

☐ Conduct a comprehensive business valuation with a qualified appraiser
☐ Review 3-5 years of financial statements and clean up the balance sheet
☐ Establish realistic valuation expectations based on industry benchmarks

Legal & Governance

The legal infrastructure of your firm either facilitates or obstructs ownership transition. Addressing outdated documents and unclear structures early protects all parties and provides a clear roadmap for decision-making.

☐ Review and update shareholder agreement
☐ Audit all contracts, agreements, and insurance policies (E&O, liability, buy-sell)
☐ Define ownership transition timeline and identify successor owners

Client Relationships

Buyers want to see diversified, stable client relationships with clear contractual protections and transition plans. High client concentration poses a significant risk, while well-documented relationships with assignment provisions provide confidence and value. Losing key clients during transition can devastate deal economics and firm morale.

☐ Inventory all active client contracts and assignment provisions
☐ Assess client concentration risk
☐ Document the client transition communication strategy

People & Leadership (9-18 Months Before)

No asset matters more to your firm's future than the leadership team that will take it forward. The strength of your succession bench has a direct impact on valuation, financing options, and post-transition success. Developing successors, transferring institutional knowledge, and retaining key employees require intentional planning and time that most firms don't allocate.

☐ Assess leadership bench strength and create development plans for successors
☐ Establish mentorship pairings between exiting and incoming owners
☐ Develop a phased communication strategy for staff and identify key employees to retain
☐ Document institutional knowledge from departing owners

Financial Structuring (12-18 Months Before)

How you structure the financial terms of your transition determines whether it actually closes and succeeds in the long term. The gap between seller expectations and buyer capacity causes more transitions to fail than any other factor. Rushing these decisions or relying on generic advice rather than AEC-specific expertise leads to unfavorable terms, tax penalties, and failed transitions.

☐ Determine total capital needed and explore financing options
☐ Structure payment terms and evaluate tax implications
☐ Engage financial advisors, tax professionals, and M&A attorneys

Operational Readiness (6-12 Months Before)

Your firm's operational maturity directly impacts both valuation and post-transition success. Documenting workflows, upgrading systems, and identifying continuity risks transforms your firm from a founder-dependent operation into a transferable business asset. This work also reveals operational weaknesses that could surface during due diligence or post-transition integration.

☐ Document all critical business processes and workflows
☐ Assess technology systems and create standard operating procedures
☐ Identify major risks to business continuity and develop contingency plans

Project Management

Ownership transitions often fail when they are viewed as one-time events instead of multi-year initiatives that require disciplined execution. Without clear milestones, designated responsibilities, and measurable success criteria, the process drifts, key tasks are overlooked, and momentum stalls.

☐ Create a detailed project plan with milestones, deadlines, and responsibilities
☐ Establish KPIs to monitor during the transition period and define success metrics

This checklist does not constitute legal, financial, or tax advice. Consult qualified professionals for guidance specific to your situation. For the FREE A/E/C BUY/SELL CHECKLIST and SAMPLE AGREEMENT, click here.