Construction Business Broker

Overview of the Canadian Construction Industry

Construction is one of Canada’s most essential and valuable sectors, accounting for an estimated total of 7.69% of our GDP in 2022. As demand for housing increases and the country’s metropolitan areas continue to expand with larger bedroom communities, the construction industry will continue to grow.

High rates of immigration, technological advances, new methods of construction like prefabrication, the need for greener construction, and efforts to invest in infrastructure are all driving growth in the construction industry. Construction businesses in Vancouver and throughout the Pacific Northwest are well-positioned to sell. 

Why Work With an Experienced Construction Business Broker?

In-Depth Industry Knowledge

The construction industry is incredibly varied; construction companies can do anything from building residential homes to building bridges and a whole lot in between. Whether your construction business is hyper-specialized or offers broad construction management services, you need a business broker who knows the industry inside and out.

Jason Brice is that business broker; he’s recently sold three diverse construction businesses:

  • Klondike Contracting Corporation (Vancouver, BC)
  • Revision Custom Home Renovations Inc. (Vancouver, BC)
  • Francis Construction Company, Inc. (Detroit, MI)

One of these construction companies renovates homes, another focuses on commercial construction in BC, while the third focuses on commercial construction in the United States. These are all very different markets, but Jason Brice had the experience to secure great offers for all three businesses. 

This was only achievable thanks to his in-depth knowledge and deep ties to the construction industry; he can help you sell your construction business and understand:

  • How to valuate your business
  • Market trends
  • The best times to sell
  • The changes you can make to sell your business for more profit
  • And more

Extensive Network of Potential Buyers

Approximately 25% of the businesses that Jason Brice sells are sold to his existing contacts. These are typically buyers, sellers, and interested parties he’s had contact with previously. There are several advantages to selling to existing contacts:

  • You have a better idea of the financing that they’ll have available.
  • You don’t have to market broadly, helping speed up the process and anonymize the deal.
  • Your business broker will already have a good relationship with the contact, helping to smooth over negotiations.

By leveraging your business broker’s existing network of contacts in the construction industry, you’ll be able to find qualified buyers more quickly. Those prospective buyers will already have a foothold in the industry; it’s likely they’ll be looking to purchase your business to expand their market or to fill a niche that they’re not specialized in. Simply put, an existing network of contacts makes it easier to find the right buyer for your business. 

Negotiations and Structuring the Deal

How the sale of your construction business is structured has a substantial impact on both the amount your business will sell for and the tax implications of the sale. Some of the elements that will be included in the deal’s structure are:

  • Between asset purchase and stock purchase
  • How much vendor take-back (VTB) will be included
  • Whether or not earnout will be included
  • And more

All of these elements will be considered when negotiating the sale of your business. There are several levers that can be moved to influence negotiations, from how quickly the deal closes to how long the business owner will stay on to oversee a smooth transition. Jason Brice has in-depth knowledge of how to use all of these levers during negotiations and will work with you to ensure you get the best possible deal for your construction business.

Everything Involved With Selling Your Construction Company

Setting a Price

Setting the right price for your construction business is complicated; you want to set the price high enough that you’ll make a tidy profit but low enough that you’ll get enough interested buyers.

Jason Brice will provide you with a free, high-low valuation after your initial consultations. Once you’ve agreed to sell your business together, he’ll gather more data on your business, establishing your cash flow, assets, and more.

With that information, he’ll come up with the best valuation strategy for your business. The valuation method used for most small and medium construction businesses is Seller’s Discretionary Earnings (SDE); SDE multipliers in construction typically range from about 2x to 3x.

Prices are never set in stone; that’s where negotiations come in. You may be willing to stay on at your company longer in exchange for a higher selling price; the opposite may also be true. Jason Brice will work with you to set a price based on industry averages and your own needs. 

Get Your Financials and Operations Organized

Before purchasing your construction company, prospective buyers will engage in a due diligence process. During this process, they’ll gain access to your financial information (under an NDA) and learn about your operations.

When selling your business, it’s important to have all of the information that your buyer may need on hand. Tightening up your operations can also help you sell your business for more money. Your business broker will help you get everything organized for the sale. 

Remove Yourself From Day-to-Day Operations

Many construction companies, especially small and medium-sized businesses, are largely owner-operated. The owner has a lot of experience in the niche the company serves; they may oversee all operations themselves.

In these circumstances, you run the risk of being too valuable. The buyer may request that you stay on in order to train your staff to be able to take on your duties. Ideally, you’ll slowly remove yourself from day-to-day operations before you sell; this will allow you to step away from the business without any friction. 

Considering Selling Your Construction Business? Contact Jason Brice Today!

Jason Brice has sold several construction companies in Vancouver and throughout North America; he can help you sell yours. Get in touch with him today for a free consultation.