What a permanent-hold buyer looks for in a business

Most buyers evaluate a business against the day they plan to sell it. We do not have that day on our calendar, so the questions we ask are different.

Cash flow that repeats

The first question is whether the profit is durable. Recurring or repeat revenue, a customer base that renews out of habit rather than obligation, and pricing that has held through a downturn all matter more to us than a single record year.

A team that can run the business

If the owner is the only person who can quote a job, manage the crew, or keep the largest customer happy, the business carries a risk that no purchase price can solve. A second layer of management is one of the biggest drivers of value in any range we quote.

Customer relationships that outlast the sale

We look at concentration, contract length, and how long the top customers have been with the business. Long relationships tell us the company earns its revenue through service, not through switching costs.

Clean, believable numbers

Two or three years of consistent statements, an understandable add-back list, and inventory or work-in-progress that reconciles. Clean books do not change what a business earns, but they change how much of that earning a buyer is willing to pay for.

If you want a sense of where your own business falls, the valuation calculator on this site gives an indicative range in about a minute.