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BizReady, Inc. focuses on Specialty Construction Contracting Businesses in California, particularly Class C and D licenses and remediation contractors.
Selling a construction company adds the burden of finding a buyer who meets the CSLB licensing requirements.
If your company is positioned and prepared properly, it could be acquired by a competitor that is growing by acquiring smaller firms.
This can be an ideal situation because the buyer will be licensed, have experience, and have established management.
To position your construction company for acquisition, you will want to demonstrate consistent financial performance and growth; measure performance against key industry benchmarks; have a skilled workforce and management structure that will continue after the sale; as well as maximizing other value drivers.
In particular, you will want to be able to demonstrate consistently:
- Accurately Estimating Project Costs
- Strong Scheduling and Project Management Skills
- Relationships with General Contractors and Subcontractors
Since 67% of specialty contractors are non-employer firms, another possibility is finding a licensed solopreneur who is ready to move beyond doing all the work by themselves alone.
A third, and more complex solution, involves the buyer having a Responsible Managing Employee (RME) or Responsible Managing Officer (RMO) who qualifies them as a licensed contractors. Sometimes it is proposed that you, as Seller, stay on in one of these positions. The CSLB sets requirements for an RMO or RME, including minimum time supervising and legal responsibilities. An attorney should be involved in establishing any agreement for you to stay on after the sale as an RMO or RME.