What a Buyer Will Ask You in Horizon City
- How much of the work comes from a few builders?
- Buyers want sales by customer. If one builder is a big share, expect questions about how long that has lasted and whether it is in writing.
- Will the crew leads stay after you leave?
- A buyer pays more when foremen and office staff are staying. Tell them who has been with you longest and who already runs jobs without you.
- Do you own the yard or rent it?
- If you own the lot or building, the buyer may want a lease from you instead of buying it. Know what a fair market rent would be.
- Are the trucks and equipment paid off?
- Buyers ask for a list of every vehicle and machine, what is owed on each, and its condition. Liens get paid off at closing.
What sells well out here
Much of the business in Horizon City follows the houses. Concrete and framing crews, landscapers, plumbing and air conditioning shops, pool and fence companies, and the offices that keep their books all do steady work east of the city.
A buyer looking at one of these companies is buying the work that keeps coming in. They want to see that it comes from many customers and does not stop when you stop answering the phone.
If you run a crew business, our page on selling a concrete contractor covers what buyers ask about bonding, bids and backlog.
The numbers a buyer will want
For a company with about $1 million or more in yearly sales, buyers start with three years of tax returns and profit and loss statements.
Then they rebuild your earnings to show what one owner really takes home, adding back things like your own pay, a family truck or a one time repair.
Most companies of this size sell as an asset sale, priced on that owner cash flow. Many trade around 2 to 3 times it. Our page on how buyers price a business walks through the math.
Cash you never reported does not count. A buyer and the bank only pay for income they can see on paper.
Keeping it quiet while you sell
Horizon City is a place where customers, suppliers and workers know each other. If word gets out early, a good foreman may start looking elsewhere.
A broker markets the company without its name, and buyers sign a confidentiality agreement before they see your books.
Texas paperwork that follows the sale
Horizon City is in Texas, so the state rules apply. Texas has no personal income tax, so you pay no state income tax on your gain, though federal tax still applies. Talk to your CPA about that part.
Your equipment and vehicles are taxed as business personal property, and the El Paso Central Appraisal District bills whoever owns them on January 1.
Buyers and sellers usually split that year's tax at closing. Our guide to EPCAD after a sale explains it.
City permits and licenses are a separate check. Ask the attorney which of yours the buyer needs to get in its own name.
How long it takes
From the day you hire a broker to the day you close, seven to nine months is normal. Keep running the company hard the whole time. A buyer gets nervous if sales dip while you are distracted by the sale.
Want a sense of your number first? Request a free valuation or call (915) 555-0193.