5 Conditions for Selling a Successful Construction Business
Date Posted: January 30, 2025
Posted In: Discussion,
From ConstructioNext: There are five must-haves if you’re going to sell your construction firm and maximize your value. Many contractors dream of one day exiting their business by selling to an outside buyer with deep pockets. They’d also like to do it while still healthy enough to travel and enjoy life away from the jobsite.
The four main ways to dispose of a privately owned company include:
- Closing the doors and walk away from it, but that’s certainly no way to maximize your value.
- Giving it away—same problem.
- Selling it to insiders, which is a very common strategy for contractors. After all, who has a greater vested interest in preserving your company, customer relationships and the careers and livelihoods of their coworkers?
- Selling it to outsiders. These are the deals where the big money usually resides.
If you want to maximize your value with option four—selling your company to outsiders—here are the five conditions that must be in place. If any of the five are missing, the value you might expect drops precipitously.
1 | Recognize that a buyer wants to buy a business, not your job.
A job is temporary, whereas a business is perpetual. Buyers want to buy businesses that could prosper whether the head guy showed up or not.