General Contractors can boost their small business in four ways

General Contractors can boost their small business in four ways ...

Chris Giambrone, CFP

You are a construction professional who is experienced at constructing or improving properties for your customers. However, are you equally passionate about constructing a viable and long-term business strategy for your future customers?

When you first started your business, you probably weren't thinking about the day you might sell it to another person. However, now that you've gotten the senses of retirement, it's time to begin planning your exit strategy more seriously.

Chris Giambrone is a professional basketball player.

One of the most essential parts of a successful exit strategy is increasing the value of your business in order to make it more attractive to prospective buyers.

Below are four strategies that general contractors may use to enhance their business value in order to attract potential buyers and a good price.

Buyers expect a smooth transition when they purchase a business. If your key workers are highly skilled, trained, and professional, that is a green flag for prospective buyers. Happy, committed employees indicate that your company culture is strong and that your internal processes are functioning like a machine.

One of the first steps you can take to increase the value of your business is to take an inventory of what you do as an employer, and make adjustments if necessary. Current industry problems, such as shortages of general labor and skilled workers, are likely to continue. This is also a chance to differentiate your business.

There are several strategies to attract and retain top-tier workers. One of the easiest is to promote your superstars from within and provide advancement opportunities to current employees. This will give you a head start on preparing your key workers for future transitions.

If youre having trouble attracting new talent, consider how you can improve your company's safety standards, benefits package, or career opportunities.

Consider what today's workforce is looking for in their career and how you can meet their expectations and desires. This will help your business stand out to potential buyers since they will not have to come in and complete reorganization after your departure (plus, this benefits the employees you care about as well).

Businesses that specialize in one area or another might stand out more to prospective buyers. By focusing on just a few core work areas or committing to a specific company value, you can fine-tune your craft and build a niched team of professionals.

Specializing may help you increase your prices, gain more customers, and even build a stronger community presence, all of which are attractive to prospective buyers.

Consider consumer and industry trends that may be attractive to your community and buyers. For example, becoming an environmentally-conscious construction business is a great way to differentiate your business from others and demonstrate your commitment to a core value. Alternately, recognizing a specific need in your community, such as lakeside landscaping architecture, provides an additional avenue for specialization.

Once youve completed this, youll be able to demonstrate to prospective buyers why and how your business is built for long-term success in your community.

General contractors and construction businesses are particularly vulnerable to cash flow limitations. These individuals are more prone to the consequences of a negative cash flow. Therefore, it is vital that you address any cash flow concerns before it becomes time to market your business.

Cash flow problems may arise from a variety of sources, including time differences between sending invoices and collecting payment, delays in processing orders, overstocking, and project delays. Find out which issues are the greatest and remedy them accordingly.

A general contractor's unique difficulties may include establishing a (better) credit line with a bank, reducing tax liabilities, or improving your forecasting and budgeting. Working with a company that understands your specific circumstances may help you take control of your cash flow with more confidence.

The world of general contracting can be a tense place. Between hiring trustworthy subcontractors, paying employees, keeping track of equipment, and adapting to supply chain issues, it's easy to become overwhelmed by obstacles. That's why your processes must be simplified so that you can deal with potential problems before it's time to sell your business.

Increase productivity and decrease inefficiency. Since time is your most valuable resource, identify the areas where time is being used improperly. Then, seek technological or outsourcing solutions to get that time back.

  • Outsource More Functions: As a general contractor, youre a master of DIY. But when it comes to running your business, DIY isnt always the best option especially when youre looking to sell your business. If tasks such as scheduling jobs, sending out payment reminders, or filing taxes are taking up too much of your bandwidth, consider outsourcing these tasks to a pro who can take them off your plate.
  • Improve Communication: Team members have to be on the same page. If they arent, projects are subject to turbulence and delay. Depending on your business, you might consider improving on-site management, communication systems, or defined worker expectations.

Streamlining these different workflow steps will make any purchase easier for a buyer and will make your business even more attractive when it comes to negotiating the value of your business.

When the selling of your business is in sight and your retirement is near, it is normal to be overwhelmed. However, entrepreneurs who fail to act strategically risk selling an efficient, low-value business that will repercussions on their retirement.

Business buyers desire businesses that are flexible, flexible, and that offer a smooth transition. And they are willing to pay more for businesses that meet these standards. For these reasons, it is important that you maintain your focus on increasing your business's value.

By dedicating time to improving your business value, you can set yourself up for success not only in selling your business, but also in expanding your wealth.

Christopher C. Giambrone, CFP, AIF

Chris Giambrone is the co-founder of CG CapitalTM, a boutique wealth management company based in New Hartford, N.Y. He is a certified investment fiduciary(AIF) and a certified financier planner at the University of Pennsylvania's Wharton School of Finance.

Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Advisor. Branch Phone Number: (315) 765-6032

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