You have worked hard to build a profitable well managed construction company that completes jobs above specification and on time. Now you would like to consider retirement and perhaps selling your construction business…..
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As a business broker selling construction companies I would like to provide a few tips.
- Sell when the construction market is strong. You are profitable. Banks will lend money. Your logical buyers, people with construction knowledge are making money and feel good. Both emotions and financial capacity of prospective buyers are in your favor.
- Have key people in place who will stay beyond your retirement date. Quality systems are a bear to develop. But key to that is quality people who implement them consistently. Buyers are buying your systems and your systems are operated by your key people. Make sure they will stay. If possible use stay agreements or other golden handcuffs in order to lock in the best of the best.
- Have a backlog. While we all look at the past to predict the future a strong backlog is the future. If your trade receives start notices the same day contracts or subcontracts are awarded make sure you have a clear bid waterfall and track your success ratios.
- Plan on staying involved in some capacity after the sale. They buyer wants to know you believe in the business and them. Often this will be an earn-out or seller take-back for a portion of the price. Your direct participation in the business after the sale may also be required particularly if you do not have much other management depth.
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