When planning to sell your business, especially your construction business, you’ll want to make sure you extract the most from the business you’ve worked all your life to build. Yes, selling a construction business is hard, especially if it’s your first time.
You need to follow the process step by step in order to get the best deals. Also, you need to make sure that you avoid common mistakes while selling your business. With the right strategy, preparation, and execution by Julie Brigman, you can attract the ideal buyer for your company.
5 Tips to maximize the value of your Construction Business before selling
Here are a few things that Julie Brigman advises you to do to improve the chances of selling your construction business for maximum value:
1. TIME YOUR EXIT
Depending on market conditions and your company’s financial health, you may be able to time the sale of your business correctly. Being an expert, Julie Brigman agrees that the best time to sell a business is when it’s still growing and most profitable, not when sales are in decline.
So if you have the luxury or possess the requisite cash flow, sell when your business is at its strongest. Keep in mind that if you decide to wait until profits start to fall or the market slumps, prospective buyers might become suspicious and use your declining financial performance to devalue your business.
A growing and profitable business is much more attractive and commands a higher selling price.
If your business is profitable, it may be tempting to wait a little longer but don’t. Sell as soon as you feel your company’s value is at its highest before an unforeseen event forces you to put your company on the market. When you land a lucrative contract or secure a major client, that’s the best time to sell.
2. DIVERSIFY YOUR REVENUE
If you only rely on a few clients for your income, you risk losing a major revenue source if anyone leaves. Relying too much on a single source of income can hurt small business owners and the value of their company. It doesn’t matter how much research or business valuation you’ve done; you can’t accurately predict your customer base and customer’s market movement or behavior.
If you diversify your revenue sources, you will be better positioned to drive the kind of outcome you want from the sale. If a source of revenue doesn’t work, the impact will be minimal, and it won’t wreck your plan.
3. KEEP YOUR EQUIPMENT IN GOOD SHAPE
In the construction industry, equipment & infrastructure make up a massive and valuable part of a company’s value.
If you want to sell for maximum value, ensure the upkeep of your equipment and facility at all times. While the maintenance cost won’t be cheap, keeping your equipment in good shape will go a long way in boosting your asking price.
It’s better to spend a little more on your assets than risk them losing value. Equipment and infrastructure are valuable in construction businesses; their upkeep should be a top priority.
4. PUT YOUR FINANCES IN ORDER
Prospective buyers will want to look at your financial records, make sure they are organized and up-to-date.
Your taxes, credit history, financial statements, along with other relevant documents, should be readily available to prospective buyers and potential investors.
Also, try as much as you can to reduce or pay off any debts you owe before listing your business.
5. PREPARE AN EXIT STRATEGY & REINFORCE YOUR EXECUTIVE TEAM
A highly experienced and expertly skilled workforce adds a lot to a company’s value. Savvy buyers will want to see that your successful business can run without you at the helm. Thus, it is essential to strengthening your team, especially your executive team, before selling.
If no one else can run the business except you, the buyer will have to bring in a new executive or form a new workforce. It will probably hurt your asking price as potential buyers will factor in the cost of assembling a new team.
Sell Your Business in Jacksonville with Julie Brigman and Reap the Rewards
Selling a small business is a process that takes many months, if not years. It’s important to consider the big picture and create strategies that will help you in finding the right buyer and pay off in the long term.
Just like running it, buying and selling your business requires patience, commitment, and hard work. Except when this process ends, the work is not just beginning—it’s finally done.
We hope you can use that hard-earned cash for your next adventure.
If you have finally decided to sell your business, contact Julie Brigman, the best business broker in Jacksonville.