When you are selling a construction company, there is much to consider. Selling your business entails more than just updating the price tags on all of its equipment and coming up with an asking price that will get buyers interested in purchasing it. Throughout the years of buying and selling businesses across many industries, we recommend 3 tips when selling a construction company:
Get A Business Valuation
It’s essential to have an encompassing and comprehensive approach to get the most out of a business valuation. That means you need to understand the market conditions. Researching the current market conditions can give you an idea of what buyers might be willing to pay today.
Pricing your property at or below fair market value may not always yield results. Still, it could attract more potential buyers if priced higher than other business properties in similar conditions. That’s why business owners need a business valuation, so they know the business’s worth before placing the company up for sale. Most business valuations require the following:
- Three years of tax returns.
- Past three years of profit & loss statements (P&L)
- Value of inventory
- Detailed list of your construction company’s assets, including equipment
- Copy of property tax bill
- Any previous business appraisals
All of the above items are essential in forming an accurate assessment of the company’s value. If you are considering selling or already have a potential buyer lined up, you must seek out a professional appraisal for your business. Without an accurate evaluation to assess its true worth, there is no way to be reasonably sure that you will achieve the highest price possible for your business.
A professional appraisal will give you insight into what your company goes for, providing an accurate account of how much it would likely cost someone to take over your construction business and continue operation. In addition, you will obtain a clear picture of what your company is worth at present and how it might be expected to grow in the future.
Determine the Right Timing to Sell a Construction Company
Construction business owners want to know the best time to sell their company. When is the best time? When your company is doing great! This recommendation applies to any business. When a business is succeeding, many business owners think they may sell for a higher amount if they wait.
There are many reasons you might want to sell your construction company, but delays can cause regret when the unexpected happens such as health issues, lost customers, or an economic downturn.
Consider Help to Sell a Construction Company
The need for liquidity or retirement often drives the decision to sell a construction company. If you consider selling your company, it’s vital to get an accurate and comprehensive business valuation from a professional broker. Here are some of the reasons why:
Access to Buyers – Since they have access to many potential buyers, brokers can help ensure you don’t miss out on opportunities or take too long trying to find a buyer yourself. Brokers also know how much companies in your industry typically sell for allowing them to get an idea of what yours might be worth. Moreover, since they work with businesses every day, brokers provide valuable insight into trends in the market and how these affect pricing – which will save time if/when you begin your search for a buyer.
Flexibility – You may be considering selling due to external factors, such as the need for liquidity or retirement, or personal reasons such as relocation. A broker can help you determine how quickly you need to sell and then effectively market your company in that time frame. For example, if you need to sell quickly, a broker can help you market the company to your network of contacts and even find an interim buyer.
Coordination – As with any sale, there are several specialists involved, including accountants and attorneys. A good business broker will help coordinate these parties to make sure you get the best possible deal and to help ensure that all aspects of the transaction are handled correctly.
A broker will assist in getting a reasonable price and bring years of experience and expertise in sales to help negotiate the best terms for your situation. A professional broker’s knowledge can be invaluable if you need to sell quickly or consider a partial sale.
More Help Selling Your Construction Business
When selling a construction company, it’s essential to obtain the most value possible so you can invest in your new ventures. Working with an experienced business broker will help ensure that your business is appropriately valued and marketed. Contact us today if you are interested in learning more about how Sunbelt Business Brokers of Sarasota, Fort Myers & Naples can help sell a construction company or any other business.