Buying an established specialty contracting business can provide an entrepreneur with something that starting from scratch cannot: an existing operation.
Instead of developing a customer base, hiring an entire workforce, purchasing equipment, and building a reputation from zero, a buyer may acquire a company with customers, employees, systems, contracts, equipment, and established cash flow.
If you are considering buying a specialty contracting business in Florida, proper due diligence is essential.
An established contracting business may provide:
This can potentially reduce the time required to establish a new company.
Florida offers acquisition opportunities across many construction specialties, including:
The right acquisition depends on your experience, capital, goals, and desired level of involvement.
Financial due diligence should be one of your first priorities.
Review:
Don’t evaluate the business based solely on revenue.
A company generating $3 million in revenue may be significantly less attractive than a company generating $2 million with stronger margins and cleaner operations.
Ask how the company generates its revenue.
Important questions include:
Customer concentration can be an important risk factor.
In specialty contracting, employees can be among the most important assets.
Determine:
A business that depends heavily on the seller may require a longer transition.
Contracting businesses often have significant equipment assets.
Review:
Determine whether equipment is included in the purchase price and whether additional capital expenditures will be required after acquisition.
Buyers should carefully investigate the licensing requirements associated with the business.
Depending on the specialty, this can include Florida contractor licensing, insurance, permits, certifications, and other regulatory considerations.
Do not assume that buying the company automatically means every license or qualification transfers to you personally.
Professional legal and licensing advice should be obtained before closing.
The purchase price is only one component of acquisition funding.
You may also need capital for:
Understanding your total capital requirement before submitting an offer can prevent surprises later.
A business broker can help buyers identify opportunities, understand seller expectations, evaluate transaction structures, and communicate with sellers.
At Truforte Business Group, our goal is to connect qualified buyers with Florida businesses that fit their acquisition objectives.
It can be, depending on the opportunity. An acquisition may provide an existing customer base, employees, equipment, and revenue, while a startup requires building these assets from scratch.
Review financial performance, customers, employees, equipment, contracts, licenses, insurance, liabilities, and the company’s dependence on the owner.
Potentially. However, the buyer should understand the industry and have qualified management or operational personnel if they do not have direct trade experience.
Potential financing sources can include SBA loans, conventional financing, seller financing, investor capital, or combinations of these.
The timeline varies depending on financing, due diligence, negotiations, and the complexity of the transaction.
If you are looking to acquire a specialty contractor in Florida, Truforte Business Group can help you explore available acquisition opportunities.
Related reading: Selling a Specialty Contracting Business in Florida, Florida Business Broker Expertise, and How Much Cash Do You Need to Buy a Business?
Thinking about selling? Learn more about how the selling process works with Truforte Business Group.