5 Conditions for Selling a Successful Construction Business5 Conditions for Selling a Successful Construction Business
The absence of any one of these requirements can put a severe dent in the value of your contracting firm.

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.
2 | Have people already in place that can run your company in your absence.
One of my peer group members has a wonderful name for this, 2iC, which means “second in charge.” Without a 2iC—and, ideally, a group of talented people overseeing estimating, production, safety, accounting, business development and project management— you’ll be of little interest to an outside buyer. A purchaser wants to see capable people throughout your company, not just a few smart, energetic people crowded at the top.
3 | Occupy a unique niche in the market.
Simply being the lowest bidder in a competitive marketplace won’t distinguish you to a buyer. A purchaser wants to see that you have lifetime customers, unique capabilities, unique processes or a niche deliverable that sets you apart from your competition.
4 | Maintain predictable, recurring streams of revenue.
Again, contractors who are only as good as their most recent bids are of little interest to buyers. You must demonstrate that you have excellent business development capabilities and have plans that generate business in predictable and consistent ways. If your strategy is to do a bit of marketing and then wait for the phone to ring, that’s not sufficient.
5 | Document a successful strategic planning process.
You've got to be able to show proven processes for generating growth and profitability, attracting the right kind of talented people, assuring outstanding customer satisfaction and maintaining excellent project management. If you can demonstrate excellent forecasting, budgeting and a track record of hitting targets and achieving goals, you have solid evidence of a strong company for interested buyers.
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