The First Steps Toward Selling Your Contracting Business

Whether an owner is thinking about selling in three months or two years, the first stage comes down to three things: the personal decision, understanding what you actually own, and preparing the company to operate without you.

1. Decide What You Personally Want

Before talking to a broker or putting a value on the company, the owner needs to answer some personal questions. Do I want to retire completely? Do I want to stay involved for a year or two? Would I work for the buyer during a transition? Do I want cash at closing, or would I consider financing part of the purchase? And most importantly: What does my life look like after I sell?

That last question is bigger than people realize. Contractors can spend their entire adult lives being needed every day. Selling isn’t only giving up a company — it’s giving up a routine, responsibility, authority, relationships, and sometimes a large part of your identity.

2. Determine What You’re Actually Selling

An owner may say, “My company does $5 million a year.” That is important, but revenue is not the business.

We need to understand profitability, recurring customers, contracts, employees, management, vehicles, equipment, licenses, reputation, service agreements, debt, outstanding liabilities, and how dependent the operation is on the owner.

The question becomes: What remains when the owner walks out the door?

3. Get the Financials Cleaned Up

This should happen immediately — even if the planned sale is two years away.

Personal expenses running through the company need to be identified. Accounts receivable need to be reviewed. Old inventory and equipment should be addressed. Financial statements and tax returns need to make sense together.

A buyer shouldn’t have to spend three weeks figuring out whether the numbers are real.

4. Identify Owner Dependency

If the owner estimates every major project, knows every customer, approves every purchase, handles employee problems, controls the bank account, and is the only person who knows how everything works, the owner hasn’t just built a business — he has built himself a very valuable job.

BBC’s job should be to help separate the business from the owner.

5. Protect the People Who Create the Value

Your technicians, foremen, project managers, estimators, office staff, salespeople, and managers may represent a substantial portion of what a buyer is actually purchasing.

Before a sale, we need to understand: Who are the key employees? Who might leave? Who could run the operation? Who needs additional training? Is compensation competitive? Is there a culture people want to stay with?

A building, trucks and equipment can be purchased anywhere. A trained team that works together and takes care of customers is much harder to replace.

6. Fix the Customer Experience Before Trying to Increase Sales

Owners preparing to sell often think, “I need more revenue.” Maybe — but adding revenue to a poorly organized operation can actually magnify its problems.

I’d rather first understand how the phone is answered, how quickly calls are dispatched, how employees communicate with customers, whether estimates are followed up, how complaints are handled, whether technicians arrive prepared, and whether customers would call the company again.

That is what creates sustainable value.

7. Establish the Timeline

If the owner wants to sell in three months, we’re essentially in transaction preparation mode. We identify problems quickly, organize financial and operational information, establish realistic value, identify potential deal problems, and determine what can actually be corrected before going to market.

If the owner has two years, that’s a completely different opportunity. Two years gives us time to improve margins, develop management, build recurring revenue, improve employee retention, document systems, clean up financials, reduce owner dependency and potentially increase what the company is worth.

“The best time to prepare your business for sale is when you don’t have to sell it.”

Because when you have to sell, the buyer controls the clock. When you’re prepared and can walk away from a bad offer, you control the decision.

Two Paths for Business Owners

I may sell within 3–6 months. Focus on transaction readiness: clean financials, realistic valuation, documentation, key employee stability, owner transition planning, liabilities, and identifying issues that could delay or reduce a sale.

I’m planning 1–2 years ahead. Focus on building value: stronger margins, management development, recurring revenue, documented systems, employee retention, improved customer experience, and reducing the company’s dependence on the owner.