How to Sell a Roofing Company
COVID-19 has impacted every industry, including the construction business. Deloitte reports that COVID-19 may lead to “supply chains disruption, shortage of subcontractors and materials, and the termination of contracts to control expenses.” Roofing companies are impacted by the pandemic, but a well-positioned roofing business may be attractive to potential buyers.
If you’re interested in selling your roofing company, you need to assess the value of your company to a buyer. Sellers must get their financial statements and other records in order, so that a buyer can perform due diligence. The process is time-consuming, and you can benefit from working with a business broker.
What Makes Your Business Valuable?
A variety of factors need to be considered before you understand what your roofing business is worth.
Business Traits that Motivate Buyers
If these traits apply to your business, a potential buyer may have a stronger interest in your company.
Diversification of Products and Services
Roofing businesses that are diversified are better positioned to generate sales during a downturn. Many roofing companies also perform siding, insulation, and construction work.
You can also drive business by specializing in a particular roofing material. Roofs are constructed using slate, asphalt shingles, clay, slate, and metal. If you offer expertise in a certain type of material, you can market the service and increase sales.
Brand Awareness, Referral Network
A roof is an expensive purchase, and consumers frequently ask the people they trust for referrals. Businesses with strong brand awareness and a good reputation receive more referrals.
Insurance agents are a big referral source for roofers. If a customer files an insurance claim for a damaged roof, the agent often refers a roofing company to the customer. A roofing business with insurance agent relationships can increase sales, even if the construction business is in decline.
Lower Staff Turnover Rates
Roofing is physically demanding work, and crews must work in all types of weather. How well does your company retain workers? If you offer continuous training, consistent work hours, and make safety a priority, you can reduce turnover.
High turnover rates increase your costs, and constantly hiring workers makes it harder to manage work crews. A potential buyer wants a well-managed business with a staff turnover rate that is lower than the industry average.
Risk Management Considerations
Roofing businesses must manage risk effectively to generate a profit. Work crews need proper training and safety equipment to minimize the risk of injury. If your firm takes steps to protect workers, you’ll pay lower premiums for workers’ compensation insurance, and you’ll minimize the risk of damaging client property.
You understand why your business is successful, and the broker will communicate that value to potential buyers.
4 Steps for Selling Your Roofing Business
Discuss your company with your business broker, so that the broker can uncover the value of your business and create a marketing plan. You may decide to make changes to improve the business before a potential sale.
1. Value your Business
What is your business worth? The answer impacts the sales proceeds you receive at closing. The brokers at Raincatcher use industry-leading proprietary valuation tools to determine a company’s value. They use expertise developed through hundreds of business sales, and they consider your industry and the current economic environment.
Business value includes physical assets, including equipment, vehicles, and suppliers, along with your customer list, brand awareness, and business reputation. This information is used to negotiate a sale price for your business.
2. Find a Buyer
Experienced brokers have a network of accountants, attorneys, and investors, and they will market your business to the network. Brokers can also determine if a potential buyer has the financial means to make a purchase. This vetting process helps you avoid spending time with bidders who do not have proper financing.
3. Prepare for Due Diligence
When a potential buyer is identified, the broker will help you prepare for due diligence. You’ll need to provide several years of financial statements, customer lists, marketing materials, an organizational chart, and contracts.
To protect your interests, the broker will insist that each potential buyer sign a non-disclosure agreement before any records are provided to a buyer. The broker will keep the review process moving forward on your behalf.
4. Close the Sale
Selling your business may be the biggest financial decision you will ever make, and the process can be emotional. A broker will be the steady hand throughout the sale process, and represent your interests until a sale is closed. Brokers work with attorneys and accountants to cover all the bases needed to close the sale.
Find an expert who can be your advocate during the sale process.
Work With an Expert
Your customers rely on your expertise to repair or replace a roof. Why not hire an expert to help you sell your business? You're busy managing the operation, and you may not have time to deal with the challenges of marketing and selling your business.
Work with Raincatcher to sell your business at an attractive price, and to gain peace of mind.
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