What a buyer asks for first
- Signed backlog and a schedule of jobs in progress with margins
- Margin by job type: new build, remodel or repair, for three years
- Warranty claims, call backs and any open disputes
- License holders and the plan for qualifier continuity
- Subcontractor roster, insurance certificates and key relationships
Backlog and Work in Progress
A buyer wants to know what is signed, what is being built and what is still a hopeful bid.
A schedule of jobs in progress, with contract amounts, costs to date and expected margin, shows whether profits are real. Overbilled or underbilled jobs can shift the numbers a lot.
If you recognize income when jobs finish, expect your CPA and the buyer's to spend time reconciling it.
The Owner Is Usually the Salesman
Many builders are the company's only estimator and client contact. A buyer sees that as risk. Start moving estimating and client meetings to a project manager, and have the buyer meet that person early.
Warranty Exposure
Finished homes come with obligations. Buyers ask about callbacks, claims and disputes, and they may hold back part of the price against warranty work. Keep records of every complaint and how it ended.
Licensing
A general contractor license is tied to the licensed firm and its qualifier, not to a buyer. Read contractor license on a sale before you decide on an asset sale or a company sale, since the choice changes who needs a license.
Subcontractors and Suppliers
Your best subs may work for you because of your relationship. Buyers ask whether those relationships carry over. Written agreements, current insurance certificates and a record of prompt payment all help.
Market Swings
New home construction follows interest rates and land costs. Buyers know that. A mix of new builds, remodels and repair work makes the company look steadier, and it is often priced better as a result.
What Buyers Pay
Most builders sell on a multiple of adjusted earnings, with pricing pulled down by owner dependence and project risk. Compare your situation to the guide on what your business is worth to a buyer, and see our valuation check for a range.