Running a construction business can be a lot of hard work. When the time comes to move onto a new project or to retire, you may be considering whether you can sell that business, and if so, what that process would look like.
In this brief guide, we take you through the basics of selling a construction business. From carrying out an evaluation to negotiating with potential buyers, here’s where you should start – and end – the process.
Evaluation
One of the first steps when it comes to selling any business – construction businesses included – is to carry out an evaluation. To do this, you’ll need to get all of your accounts in order, so that you can easily assess any liabilities, work out what your assets come to, and get a solid idea of both past and projected future turnovers and profits.
Based on this concrete evidence, you should then be able to come up with a figure that’s representative of the business. In certain cases, it can be important to get an external valuation, so that you have an impartial voice to add to your figure.
Contacting a business broker
Early on in the sale process, it’s worth reaching out to a business broker like Dexterity Partners to see if they can help. Business brokers can often assist with multiple different aspects of the sale, from providing general advice to leveraging their network to expose your business to the right potential buyers. If you can find the right broker, they can make the sale far easier and potentially drastically increase the amount that you can get for your construction business.
Marketing your business
Once you have a figure you’d like to get for your business, and you’ve thought up a strategy with your business broker, you can start to market your business. In some cases, you’ll need to be quite discreet about how you do this.
Most importantly, you don’t want to worry any existing clients by making them think that the business might not be around soon. This could have adverse effects on the business, impacting both its value and its ability to attract future clients.
Negotiating with buyers
Once you’ve marketed your business and identified potential buyers, you can start to negotiate the sale with them. They’ll likely need to carry out their due diligence on the business, meaning that you’ll have to have all the relevant paperwork ready for them to inspect.
It’s important that you’re open about any shortcomings or liabilities connected to the business at this point; once they’ve gone through with the sale, if they find out you’ve deceived them, you could end up facing serious legal trouble.
Exactly what it looks like to sell a business will differ from case to case. For example, you might already know potential buyers, or you may want to hand it over to someone who’s going to continue to operate based on the same values. It’s important that you think about your motivations before you start the sale process, so that you know which direction you want to take it.