Thinking of Selling Your Construction Business? What You Need to Know in 2022
Best time for construction business owners to sell their construction business
In business, timing is everything. Construction industry entrepreneurs are often faced with the decision of selling their business at the peak of a market cycle or delaying it until a downturn occurs. According to Lake Country Advisors, the best time to sell a construction company will depend on fluctuations in demand, general economic conditions, and competition.
Market cycles are a normal part of business. The general trend for construction companies has been towards growth over the past decade, with some dips into recession. Small businesses typically fall prey to less severe downturns due to fewer resources, less financial backing, and fewer client relationships than larger businesses. The result is that small companies tend not to weather the storm as well as their larger counterparts do.
The construction industry is not immune to cycles, as the planning and development stages are a major financial drain on a company’s balance sheet. Amid these fluctuations, business owners should still have a plan to handle situations where they might need to cut costs. Being prepared ensures you can continue providing quality services that your clients expect without sacrificing the bottom line.
Smaller companies typically have less financial backing regarding bank loans, federal tax credits, and government programs than their larger counterparts. Smaller companies are also perceived to be at a greater risk of going out of business, increasing their investment value. To capitalize on these opportunities, you need to have a plan in place in case you do decide to sell your construction company.
In addition to a financial plan, you need a contingency plan that includes all the possible scenarios that could affect the going concern of your construction company. A contingency plan may include liquidating assets or paying suppliers before they are due. If a construction company is struggling financially, the owners need to be prepared to take measures to keep it running.
Why the construction business is a hot commodity
Construction is one of those industries that never goes out of fashion. This is because the construction industry has such a wide range of jobs that people are always needed to take care of various positions. Of course, some positions require training or skills, but in this booming economy, construction workers almost always have employment opportunities.
Construction is an ever-growing industry with a promising future. The construction industry will make up 12% of GDP by 2022. The construction industry is also a great investment, with a CAGR of 4.2% for the next seven years. However, as more and more construction work is done using robotics, this will change the market. Some companies have already begun to use automation in their sites to speed up production rates and lower labor costs. This is why there will be fewer construction jobs in the future and why the industry may already be oversupplied.
The construction industry is also used to build new manufacturing and commercial sites that are required to be built because of the growing demands of these two industries. These two industries are among the biggest in the US, and they constantly need warehouses, factories, and other structures and buildings. With this, there is almost always a demand for construction workers.
The construction industry is booming, and many job openings exist in many different areas. That’s one reason why the construction business is a hot commodity for established businesses looking to expand and those looking to sell their businesses.
The best and fastest line of action is to get in touch with Lake Country Advisors to talk about selling your construction company. Our business advisors have all the skills necessary to safeguard you and your company throughout the process because they have received training as business brokers. We at Lake Country Advisors will assist you in making an informed choice about how to sell your company and raise its worth. Contact us for more information.