Understanding the Challenges of Selling Your Construction Business – Part 2.

By Cotney Construction Law.

The vast majority of businesses that are listed for sale never actually sell.

large majority of businesses that are listed for sale are never actually sold. While you may feel as though your business is worth a certain value, the simple truth is that it can be extraordinarily difficult for even a successful construction business owner to find a prospective buyer. This is part two of a four-part series which explores the challenges of selling a construction business. In this section we discuss how to gauge the value of your business during the selling process.

Knowing What Your Business is Worth

If you have never sold a business before, their is a very real possibility that you do not have an accurate valuation of your business. Although as an owner you might understand the ends and outs of your business operations, without a firm grasp of the market, you may have no way of knowing its actual worth. This could lead to a very natural inflated value of the business; however, if you are seeking a somewhat unrealistic asking price, then you are really only hurting yourself. On the other hand, if you begin to lower your asking price, prospective buyers might see that as a lack of confidence in what you, the owner, are doing. You are in essence sabotaging your own sale by looking for an asking price that is not realistic.   

 Determining the Value

Before selling your business, you must determine the actual value of your business. In order to do this, you need to analyze your profit margin over the last few years, evaluate all of your assets and liabilities, and compare your business to your competitors in the market.

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Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.