Friday 18 December 2015

Don't Sell Your Restoration Business Just Yet

Posted by at 8:32 AM in


That’s right – don’t sell restoration business until you have given me the chance to tell you how you can double your sales price in just two years! That’s right. Selling your restoration business is all about being ready to sell AND getting top dollar for your sale. How do you do that? Simple! You need growing revenue, improving per job profits, the greatest adjusted net profit possible, and the largest industry multiple.

Here’s how you sell for top dollar.

  1. Buyer’s want to buy a growing company not one slumping in sales. If you don’t have a plan to accelerate your top line revenue growth and sustain it over the next several years, you won’t get top dollar.
  2. You must earn per job profits at the upper end of the industry average. Not only does this increase cash flow, cash reserves, and your personal wealth – it also demonstrates that you have a quality internal operation that produces those profits. If not, there is something wrong with your operation and that will hurt your sale. You should be earning 75% profit on your mitigation and 50% profit on your reconstruction services.
  3. Your annual net profit plus sellers’ discretionary expenses (owner salary and draw, personal benefits, allowances, etc.) leads to a final number to which a multiple is assigned and that is your potential sales price of your business. The greater the net profit the higher the sales price.
  4. The industry multiplier is determined by how well the company achieves the first 3 factors. The industry multiplier range is 2 times to 3.5 times. Imagine the difference this range can make – for example, if net profit plus seller’s discretionary expenses equals $1 million and your multiplier is 2 your top sales value is $2 million but if you are really doing well and running your business like a pro your top sales price could be increased all the way to $3.5 million – that is $1.5 million difference.


If you take your current year as your base and allow me over the next 2 years to help you accelerate your revenue growth and improve your internal operation in order to achieve higher profits you can double the top sales dollar value of your business.

BUT STOP – if you are a mitigation only contractor and plan to sell your business I have the most transformational opportunity imaginable for you. If you add construction services over the next 2 years you can double, even triple your top sales price – in just 2 years!

Yes, you can!! Look at the numbers: If you are a $1 million mitigation only company you are doing approximately 400 mitigation jobs a year. If you captured the rebuild for each one with the average reconstruction invoice of $10,000 you could add $4,000,000 of revenue and at 50% profit you could earn $2,000,000 in profit. WOW!! All this is true. Adding rebuild services is not that hard and at the end of 2 years you would have a wonderful construction division that has transformed your business and your potential sales price.

Let me ask you - Is retiring to the life you have always dreamed of having worth a 2 year investment of time? DON’T SELL YOUR RESTORATION BUSINESS until you have made it ready to sell and then retire to the life you are dreaming of.

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