N3 Business Advisors
What to Look for in Potential Buyers, when you want to sell a Construction Company?
Updated: Feb 26
Selling a Construction company can be a tricky business. Many risks are involved, and getting ahead in such a competitive market can be challenging. But if you're looking to sell your construction company, instead of going out on your own, consider building a team of advisors lawyer, accountant, business appraiser, business broker, merger and acquisition advisor, all depending upon the complexity of your business transaction.
Take note of the following when thinking about selling:
● What does the buyer want?
● How will they use our services?
● Who else is involved in this deal?
● What do they bring to the table?
● Will those people be able to help us grow even further or stay where we are at this point?
● Is there someone who would benefit more from buying our services than we would from selling them?
These are just some questions needed before deciding what's best for your business long-term.
Consider where you are in the construction business cycle: Considering where you are in the construction business cycle would be best. If you're in a boom, buyers may have fewer opportunities. If you're in a downturn, more potential buyers will likely be looking to pick up less popular projects.
If your company has been around for some time and has not seen much growth or contraction since its inception, it may make sense to focus on selling rather than building new projects or expanding its scope of operations (which could lead to more expenses).
Understand what a buyer is looking for in your construction business: When considering selling your construction business, it is essential to understand what a buyer is looking for in the industry. Here are some key factors that make a company desirable:
● The ability to grow quickly and profitably
● A proven track record of success with past customers and clients (this can include references from previous employees)
● An established brand name that has have built over time by building trust with potential customers.
Look for investors who are committed to maintaining a reputable company: When looking for a buyer, you first should find out whether or not they are committed to keeping your company's reputation. If they have no experience in the industry, it could mean that they don't care about its reputation or will let things slide if it means making money for them.
Look for investors who have been successful at other construction businesses before and know what works and what doesn't work when running a company like yours (or even just being part of one). You want someone who understands how essential maintenance is to keeping everything running smoothly and knows how much time you spend on maintaining this aspect of your business! Find experienced buyers in similar ventures or organizations that quickly turned into cash or assets.
When selling your construction business, you'll want to find experienced buyers in similar ventures or organizations that turned into cash or assets quickly. Locating purchasers knowledgeable in the building industry and moving businesses to different locations is an essential part of the process.
There are many reasons a seller may want to sell their company: retirement, relocation, health issues, etc., but if your goal is making more money than what you make now without having any responsibilities, then this isn't the right fit for you!
Look beyond the immediate value of the deal: When selling your business, you need to consider the long-term value of the deal. One can quickly become overly enthusiastic and must remember to consider your actions' implications.
If you're selling your construction business for $2 million and plan on opening another one within five years, why not just keep working at this one? However, if things can be improved or added to the new company (such as new equipment), then it would be wise for them to do so before making such a significant investment.
There are numerous ways for construction companies to dispose of their business, but it is paramount that they are aware of the particulars of each option before making a decision. Some things to remember when selling your construction business are advisable. For example, consider the following questions:
● Where are you in the construction business cycle? Understanding the market for a company's services or products can help determine what kind of buyer might be interested in purchasing the company. If things aren't going well and people aren't signing on projects or making money, it might be time to sell anyway. On the other hand, if there are still some good years left in this industry and plenty of buyers out there looking for good deals on new builds (or even just rehabs), then hanging around will lead to better opportunities down the road instead!
● What does a buyer want? Different buyers have different needs, so make sure you understand exactly what type of person will benefit from owning their own construction company before making any offers! Some investors seek experience working with large corporations, while others prefer smaller independent firms with fewer employees per project. Some people want financing agreements, while others prefer cash upfront.
Consider bidding higher prices per square foot since those costs could offset losses incurred solely. Conclusion There are many different ways to sell your construction business, but we recommend considering the following when choosing whether or not to sell:
● Where you are in the business cycle of your company.
● What kind of buyer is interested in buying into your venture?
● How soon do they need money or assets?
If you follow these tips, we've helped with some of the hard work so that you don't have too much stress on making this important decision
At N3 Business Advisors, we are a M&A Consulting firm that specializes in working with the owners of Construction Companies. We are not like other business brokers or brokerage firms that will try to buy and sell anything they can get their hands on. Our focus is exclusively on helping the owners or HVAC, Plumbing, Roofing, Flooring, Construction Supplies and other construction companies to help them buy and sell business across Canada. Please reach out to our team of advisors to discuss the businesses for sale that we are currently working on and discuss the buyer profiles that are actively in the market looking to buy small business.