Q: What are the 2-3 most common hurdles when selling a restoration business?
JT says: Restoration businesses vary widely in size, services, accounting methods, cultures, owner involvement and more. Considering this variety, the following typically gives buyers and lenders the most heartburn:
Inconsistent Sales: Likely resulting from a large weather event, LL/CAT project, it creates uncertainty when determining an accurate Adjusted EBITDA/Cash Flow.
Improper Accounting: Possibly ‘kitchen table’ accounting, or more complex issues- Timing of revenue recognition, WIP adjustments, overhead allocations, etc.
Owner Involvement: Owners of smaller companies (often husband/wife teams) wear many hats, replacing their knowledgebase, skillsets and responsibilities can be daunting.
The above issues do not automatically mean a business is not saleable. Extra planning is simply needed for the best possible outcome.
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Have a question for JT? Don’t worry, all questions will remain anonymous! You can email JT at jt@exitstrategies360.com.
