How Long Does it Take to Sell a Plumbing Business?
We have bad news for you; most plumbing businesses don’t sell. It isn’t so much a question of how long it will take your business to sell but how long it will take you to prepare it for sale. If you do that job properly, your plumbing company should sell in an additional nine months. If it is still on the market after that, it’s more likely that you need to go back to the drawing board and make your business a more attractive option for investors than that it will sell. So, to minimize the time it takes to sell your plumbing business, you need to understand who might buy it, why, and how you can improve the business for their needs.
Who Buys Plumbing Businesses?
Investing in a plumbing business is different than being an angel investor in some new enterprise. Plumbing is a stable and necessary industry. It’s unlikely you’ve invented anything new, but next to impossible that the industry will disappear. That means those who buy plumbing businesses are looking for solid businesses that run well. Who buys these? Potentially:
- Your competitors and other plumbing businesses
- Private equity companies
- Independently wealthy investors
- Businesses in related fields, like HVAC or pool companies
- Entrepreneurs who specialize in buying contractors’ businesses
What Makes a Business Attractive?
By and large, these kinds of buyers are not looking to buy your tools or equipment. They could buy those anytime. What they want instead is to buy a thriving business that has smart practices and good staff, which will keep it profitable for the foreseeable future. Your buyer may not want to step in and fill your role, so the business needs to run well with minimum guidance from them. What can help?
- Documented processes: How you run your business is what makes it successful. If you’ve documented these processes, you can pass them on.
- Stable employees: Your employees should be happy and stay with you for a long time. A lot of turnover makes it harder to keep the business stable after you leave.
- Reputation and branding: Strong branding and a good reputation are often the bulk of what an investor is paying for.
- Three years of financials: Your investor will want to see how your business has done over the last three years. Your taxes, contracts, inventory lists and other financial documentation must be up to date.
Who to Get Help From
You should take some time to make business changes that will make your company more attractive to buyers. You don’t have to go it alone. A business broker can help you understand what your plumbing business is worth, what areas it needs to improve in and what kind of timeline you may be looking at to sell. Some of their recommendations may include:
- Outsource what you do: If there are tasks you currently do that your buyer cannot, one of your options is to outsource the tasks. Hire virtual receptionists to take calls and make scheduling decisions.
- Hire an accountant: Getting your finances in order and presentable is absolutely critical for sale.
Move to contracts: Contracts for maintenance are valuable to buyers because they are stable income.