How Do I Sell My Construction Business?
Construction businesses can be very profitable, but the time always comes for the construction business owner to step away. Whether you have decided to retire or move on to a new venture you want to make sure that you get the best price for the construction business you have put years of your life into. With the right broker helping you can sell your construction business for a price that you are comfortable with in almost any market. Strategic Business Brokers Group has over 30 years of combined experience and are here to help you navigate the often-complex process of selling your business.
DETERMINING SALES PRICE
Setting a competitive sales price for your construction business can be a complex process. There are many factors that you must account for in setting the price of your business. You may have noticed a similar company in your area selling for a certain amount of money but that does not mean you will receive the same price. Construction businesses are valued on the company’s discretionary earnings. One-time investments, pre-interest, and pretax profits before non-cash expenses and non-related income expenses are included in discretionary earnings. The amount of discretionary earnings will help you determine how your business is perceived by prospective buyers. Having accurate and up-to-date financial records is also important in determining an accurate valuation of your construction business.
MAINTAIN YOUR EQUIPMENT
Construction businesses have a lot of equipment and machines they have to decide if they want to sell with their business or sell them off individually. It is suggested that you sell your equipment with your business to add extra value. Potential buyers will be more willing to buy your business if the equipment is included as part of the sale. Business owners looking to buy a business will want to open their doors as quickly as possible and have equipment ready for the job will help them do this.
The equipment and machinery you include in the sale of your construction business needs to be in working order. Heavy machinery down to hand tools all need to be in working condition and should be serviced before selling your business. If when servicing your equipment you find a piece of machinery is not working properly you must disclose this to the buyer to prevent any issues after closing. You may not need to replace or purchase new equipment before the sale. Just maintain the equipment you have.
SHOW YOUR BUSINESS CAN WORK WITHOUT YOU
One issue with construction businesses is the company often revolves around the owner. It is important to make the selling of your business about the company and not about you. You have been part of the continuous operations of the business since the first day but now it is time to step away. Many construction business owners aren’t afraid of getting in the field and doing the work alongside their employees. This can be a benefit and a curse when positioning your business for sale.
You need to ask yourself if your company can continue operating without you? If you find it difficult to answer this question, potential buyers will most likely notice that. Ensure your business is in a strong place when you decide to sell. Having management and a team of employees in place will go a long way in making sure the sale goes through.