Learning how to sell your roofing company can be overwhelming, especially if you’ve never sold a business before.
Many factors go into properly selling a roofing contractor business, but Roofer’s Guild can break it down into manageable steps.
Our vast experience in the roofing industry allows us to provide insights that can help you with the business sales process.
Should You Sell Your Roofing Business?
The decision to sell your roofing business is one that only you can make. It is a case-by-case analysis that requires inside knowledge of your current situation, profitability, and long-term goals.
Whether you are pivoting, turning to a bigger and better venture, or are just ready to retire, selling your roofing company can be a daunting concept.
Still, it is an enticing one. That’s because the roofing industry is one of the safest bets. As a result, the revenue generated by the roofing industry is expected to rise steadily over the next eight years, resulting in an annual growth rate of 4.3% up until 2030.
If you have worked to build up a successful or even just a stable roofing company, you could be sitting on a very, very hot commodity. However, because of the steady growth and stable demand for roofers, investors will purchase already-established roofing companies in 2024
However, there are still hurdles. Only about 10% of roofing companies that make it to market for sale are actually sold.
Of course, the odds are much higher if you sell to a team member or gift your roofing business to a family member. But what if you’re selling to an outside buyer? In this case, you have to take steps to make your company more “sale-ready” and enticing to an outside buyer.
Steps to a Roofing Business Sale
The following post outlines essential steps to make your roofing business more enticing to buyers and increase your chances of a sale.
1) Start with a Valuation
The first step is for an accredited business appraiser to assess your business. A business appraiser, in a nutshell, will carefully inspect the aspects of your business to determine how much it is worth.
A business appraiser will also value your business based on the different sales paths, whether you plan to sell to an outside buyer or an inside buyer.
A company valuation will give you a realistic idea of what kind of return you can expect. You may be hoping to get a certain amount for your business, but a valuation will give you a more accurate idea of its worth.
Having a concrete number helps you ask for a more realistic price and increases the chance of a sale. For example, a valuation is significantly higher than the seller expected in some cases.
As a result, it’s crucial to have your business professionally appraised.
2) Plan Ahead
If possible, give yourself a solid year to prep for sale. At this time, you should be thinking about things that will make your business look more enticing to potential buyers.
For example, internal auditing is very helpful to ensure all your financials are in order – something buyers will prioritize.
You will also need to let employees know you will sell the company. Naturally, some will want to stay, and some will want to go.
Giving time for this shift in personnel is also crucial, as you want your business to be as stable as possible when it hits the market.
3) Assign Successors
It may be scary, but you must consider how your roofing company will operate without you. You probably already have a management team in place or at least an idea of someone within the organization who knows it very well.
It will be essential to train these people before the sale and equip them to run the show depending on the new owner’s preference.
Remember that you want to make your business as attractive as possible. Selling a company with an absence of leadership or with chaos and confusion will only hurt your chances of a sale.
Buyers need to know their investment is ready to hit the ground running. They won’t want to seek new personnel or scramble to find people who can answer their questions.
Instead, have these people in place and ensure they can answer all questions and run the business in every regard.
4) Trim The Fat
As an established roofing business, you probably incur annual expenses that are more or less at your discretion. Things like annual bonuses, company retreats, lunches, team-building events, and company vehicles are all viewed as superfluous during a sale.
In other words, the new buyer will likely change the structure of these expenses, at least if not eliminate them. Eliminating these expenses in your financial reports to reach a normalized earnings figure will make the books look much better to potential buyers.
In 99% of cases, it will increase your company’s profitability, and that’s always a good thing going into a sale.
5) Consult with an Expert
Besides a business appraiser, working with an exit planner or adviser can be very helpful. These professionals help with the transition and should point out key factors that influence these types of business sales.
For instance, a good adviser will help you determine the business distractions that could kill a deal, like problematic contracts with suppliers.
There are many things that a buyer will look at before making an offer – things that have nothing to do with personnel or finances. A professional exit strategist will help you identify these aspects and make them look as streamlined as possible.
6) Create a Narrative
As the founder and existing owner (in most cases), you are uniquely qualified to build a narrative around your company. Rest assured, a strong narrative will help you sell your roofing company in 2024.
Previous success and the data to prove it are integral to establishing a narrative that attracts buyers. The intrigue of taking an asset and streamlining it for continued success is perhaps the most attractive proposition for prospective buyers.
Be sure to consider your current contracts, the nature of the local market, development projects in your area, and the state of your competitors. In addition, a training program for team members adds value to your company. Finally, documenting projected revenue is essential.
All of these things should work together to paint a picture of the grander opportunity that your business represents for potential buyers. Include the history of your company as well, but emphasize the future.
Maybe contractors you have worked with in the past will be undertaking big jobs shortly. These are all fuels that will power the desire of buyers. Painting a picture of a very bright future for your company may even fetch you a higher selling price.
Next Steps to Sell Your Roofing Company
Once you decide to sell your business the next step is typically contacting a broker. By following the steps outlined in your post, you are in a favorable selling position. However, a broker can use their resources and contacts to identify high-conversion buying prospects that lead to a profitable sale.
