Business for Sale, Would I Buy It | General Construction

So in today’s version of “Would I Buy This Business for Sale”, we have an established general construction firm with established clientele. I can say right off the bat I would not buy a construction business. I think they’re a huge headache. But let’s keep looking just for fun’s sake to see what is involved in this one. They’re asking 1.6 million. Sales of [2,497,020]. And cash flow of [794,612]. 30% profit and a 2x multiple. 1.6 million for about 800,000 in cash flow. So it says established in 2009. Grown from humble beginnings. Specialized in remodeling and new home construction. The business focuses on residential remodeling. So when they say establish clientele, my question really would immediately be, how many of your clients are actually repeat buyers, right? Once you’ve had somebody come in and redo your kitchen and bath, what do you need them again for? At least not for another five or 10 years at minimum, right? These projects tend to be one at a time and one time only. Cap on your ability to grow a business like this is how many crews can you put in the field at once to do projects. And the downside is if you have five projects at once and now you’ve got a crew of 25 people working on this. But then two months later those projects are done, you only have one new project. What do you do with all those people you just hired to work on this thing? It’s hard to have a consistent flow year-round of construction projects. Which is why so many construction firms struggle to meet deadlines, to stay on budget. Because they’re always struggling with crew that come and go. Subcontractors that come and go out of business and come back. And managing their workflow. They always wanna say yes. They wanna win projects cause they wanna keep their staff busy. But they may not be able to deliver as consistently as other kinds of business. So I would personally not want the headache of trying to run a construction firm. And the reality is you can start a general contracting business with basically business cards and a license. And go sell jobs. And as soon as you have a job you can start hiring, use subs. Once you’re done with the job, the subs don’t need to work for you anymore cause they’re not your employees. Paying a lot of money to take over someone else’s business that is still always in the hunt for new jobs just doesn’t make a lot of sense to me. I think it’s a hard business to sell and certainly not one that I would buy.

More about this series, CapForge’s owner and founder gives us a little behind-the-scenes on what a good or bad business would be. CapForge helps tons of clients either buy or sell business and Matt was a business broker before starting CapForge. Let’s look at some of these businesses up for sale and see if Matt would be interested in buying them.