How to Sell a Roofing Company in California: See Industry Facts
Are you a baby boomer business owner looking to sell your roofing company in California? If so, you need to know about the current market conditions and what buyers are looking for. In this blog post, we’ll discuss the key factors that will help you sell your business successfully. So if you’re ready to sell, read on!
The construction industry is booming in California, thanks to its large population and demand for building projects following natural disasters like storms. The global market will reach nearly $15 trillion within the next decade according to Dun & Bradstreet’s 2022 Industry Profile!
The construction industry has been one of the few bright spots in an otherwise sluggish economy. With nearly 12 million privately owned businesses, retiring Baby Boomers will leave behind a major impact on this booming market-and you could be next!
This means it’s never too late to sell your business if retirement is looming nearby – especially now with news that demand for workers seems set to rise over time as more homes are being built than ever before…
However, with the market flooded with individuals hoping to move on to their next adventure, selling your business may be difficult. Whether you are selling to retire or to move towards a new industry, here are some things to consider before selling your construction company, or roofing business niche in California.
What to consider listing your roofing company for sale
The process of selling a roofing business can take up to ten months, and the chances for success are low. However, there’s hope! You just need one thing: knowledge about how best to practice this type of transaction with your company so that it goes smoothly from beginning until the end – without any hiccups or surprises along the way.
Preparation is key: the earlier you begin preparing to sell your construction company in the roofing business, the less hassle you will have to deal with later. In other words, ensure your “exit plan.”
Before selling your construction roofing company, consider:
- What is the value of your roofing business?
- What are the tax implications of selling your roofing business?
- Is now the best time to sell your roofing business–in other words, is my business currently appealing to potential buyers at this moment?
- How can you best maintain your roofing business throughout the selling process?
- What are your options for potential buyers–are they current employees, competitors, equity companies, etc.?
What is your roofing company worth?
Before selling your roofing company, know what it is worth. Many factors influence the value of your company, the most important being your company’s assets, liabilities, and equity.
These three factors generally determine your roofing company’s value. They may be analyzed through multiple perspectives, such as the market value of similar businesses, the fair market value of your company’s assets, your company’s future annual returns, or your annual income.
However, there are also intangible factors that influence your roofing company’s value, such as:
- Broad client and customer base
- Unique selling strategies
- Good reputation
- Cash flow
- Location within a populated geographic region
- Reputable management
Additionally, the construction industry is showing trends toward sustainability, such as increasing demands for solar roofs and shingles. The growth in this sector will be driven by businesses or contractors specializing in roofing Siding, and sheet metal which is forecast to grow at an annual compounded rate of 4%.
If your construction company offers or supplies equipment for these services, it may have a higher value within the California construction industry.
Selling your construction roofing company
Selling your roofing company in the construction industry is a complex process. No matter the size, it is highly recommended to find a professional representative to guide you through the process. Construction business brokers or intermediaries bring knowledge and expertise that will make this transition easier.
Prepare your construction roofing company for sale
A construction business broker will perform a business valuation to estimate the value of your construction company in the roofing business. This will help determine a fair but competitive asking price. An inaccurate estimate may cause you to suffer a loss of potential income or cause a buyer to shy away from a deal.
Create a business profile to describe your company. Your roofing construction company should be presentable but remain truthful and forthright about the facts.
Finally, it is essential to have all of your documents in order. This includes documents such as previous years’ financials, lease arrangements, lists of equipment or fixtures included in the sale, partnership agreements, previous sales or marketing materials, etc.
These and all following procedures are undertaken with the utmost confidentiality. Prematurely disclosing information may be harmful to your business and its assets.
Marketing to potential roofing business buyers
The low entry barrier for the construction business as well as competition from big-name suppliers such as Lowe’s and Sears may make it difficult to find a buyer at the right time.
Depending on the size of your business, your potential buyers will vary. Marketing should be tailored to the specific buyers through methods such as:
- Telemarketing
- Networking
- Direct mail
- Newspaper or trade journal advertisements
The market is most crowded with small construction companies or individual contractors. Selling to a current employee or a competitor looking to make an acquisition offer may be best.
Selling roofing construction companies, or companies making between 500 and 1 million USD annual profit, is difficult. These are purchased by individuals, though it is possible with experience and good credit. You may be able to sell your company to a competitor or an equity firm.
Roofing construction companies that make over $1 million in annual profit are easily sold with the help of a mid-market investment bank, though this is an expensive venture. You may choose to sell directly to a strategic buyer.
Closing the deal on your construction roofing business
After securing a potential buyer, your professional representative will guide you through negotiations. These ideally result in a written agreement, after which you will transfer possession and responsibility of your roofing company to the future owner and receive the full agreed-upon payment.
Mistakes to avoid when selling your construction roofing business
Here are some mistakes to avoid when selling your roofing construction company in California:
- Handling everything yourself. You’re a Rockstar! But if your company is dependent on you, putting everything on hold to manage marketing and selling may cause serious disorder that will make it appear less appealing to potential buyers.
- Being dishonest about your company’s situation. honesty is the best policy when selling your business, and being upfront about its condition will ensure that you don’t lose potential buyers.
- Not checking financial, tax, or legal implications of selling your business. Speak with your business broker about reasonable expectations and profits following your sale. They may supply you with a task list to ensure that everything is in order.
Final Take
Selling your roofing construction company is a life change that requires forethought and careful planning. Before selling your business, know its worth in both tangible and intangible assets. Find a reliable professional representative to manage the process while you continue to maintain your business. Market to and negotiate with vetted buyers and close for a reasonable price.
If you would like help getting the most out of your construction company through this process, contact us today for a free consultation. We have helped many owners just like you get the best return on their investment when they decide to sell their businesses.
Contact Rogerson Business Services to help you with more information today!
With a construction business broker at your side, we feel confident that you will sell a construction company in the roofing business at the highest price.
If you are considering valuing and selling your roofing construction company within six to twelve months, give Andrew Rogerson, a certified business broker based in Sacramento, California, a Call at 916 570-2674 or email him at info@rogersonbusinessservices.com who services the whole state of California.
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