How can a business broker help sell your plumbing business for the best results?
Are you planning to sell your plumbing business? A business broker can help you manage the complex and time-consuming process and get the right selling price for your business. Plumbing businesses are attractive to buyers because there’s a consistent need for plumbing services, regardless of economic conditions.
So, there’s a high chance of getting a tidy profit out of the business that you’ve built over the years.
The process of selling a business, however, comes with a lot of headaches, and the potential for mistakes is high. Sometimes, emotions get involved, too. With this in mind, it’s a good idea to enlist the aid and support of an experienced business broker.
Here’s how to sell a plumbing business for maximum profit with a business broker:
Prepare Your Business for Sale
When you’re ready to sell your plumbing business, you can’t just hang up a “for sale” sign and expect to get offers. It takes huge amounts of time and preparation to sell your business for maximum profit. The more time you take to evaluate, prepare, and market your business, the higher the chances of increasing the transaction’s success.
The most attractive plumbing business for sale has documented systems in place that the new owner can use to operate the business. So, your business broker will help you make sure the company’s financials, tax returns, and policies are in good shape. Three years of solid financials are an absolute minimum. These should show positive performance in terms of gross margins, sales growth, backlog, and other metrics used in the plumbing industry.
It’s also important to:
- List and price your plumbing business’s assets
- Organize your legal paperwork
- Fine-tune daily operations
- Make sure your team is well-trained and happy
- Have effective pricing and marketing strategies
- Have a diverse business model
- Keep your receivables in good shape
Provide a Professional Evaluation
As a plumbing business owner, your goal is to make money when you sell. But do you have an idea of what your business is actually worth? Finding out how much your plumbing business is worth is not a straightforward process. You need to work with a broker to dig into the details, uncover the true value of your company, and add credibility to the asking price. The plumbing business broker will take into account everything from sales and inventories to business assets and debts.
Potential buyers will be looking at two values: your company’s current bottom line and its potential future bottom line. Your business broker will base your business’ value on a multiple of EBITDA (earnings before interest, taxes, depreciation, and amortization) after certain expenses are added back in. To determine your future potential income, the business broker will look at how many leads you’re getting and how marketable your business is. The goal is to make sure your business has the opportunity to grow.
Find the Right Buyers
Plumbing businesses are always in demand, and you may be tempted to sell your business on your own. Unfortunately, taking this route will have you wasting your time with individuals who do not have the financial resources to make the right offer. Dealing with someone who is not a serious buyer can be very frustrating.
An experienced business broker has a network of vetted and pre-screened buyers who are looking to make a deal and have the resources to buy a business. A broker will also have an extensive marketing program, which may include internet marketing, print ads, and direct mailers. The type of marketing plan offered by a professional is far more effective than you could manage on your own.
When your business gets the exposure it needs, your business broker will manage all inquiries, so you won’t have to deal with phone calls or emails. When you work with a business broker, you’ll save time and find a qualified buyer faster. Most importantly, your broker will make sure your business is bought at the best price possible.
Manage Due Diligence
Serious buyers will assess your business documents thoroughly before making a deal. A business broker will help you gather and organize the most important documents, simplifying the process and making your plumbing company more attractive. They will also perform a detailed investigation of all numbers, metrics, and facts about your plumbing business before signing a contract.
If any documents are missing or the buyers have any questions about your data and accounting, your broker will handle all those and make sure everything is moving smoothly.
Get the Best Price
Business brokers are experienced negotiators. They know how to take advantage of opportunities to sell your plumbing business for maximum profit and avoid potential pitfalls during the sale process. The broker will address the laws, regulations, licenses, and permits that impact the sale. They can also help create a closing and transition checklist.
A business broker will also be your advisor, providing a valuable resource to help you plan for your next steps once you’ve sold your business.
Work with a Trusted Business Broker in Florida
Lonnie Veasley is an experienced business broker who has worked on hundreds of successful business transactions and is here to help facilitate the process of selling your plumbing business.
Lonnie and his team will work to transform your company into a ready-to-sell enterprise, provide valuation services to reach a fair market value, attract more potential buyers, and get maximum value for your business.
