Electrical contracting business

What is your contracting business worth now?

You want to get out, but you don't know where to start. How much are the years of sweat equity and hard work worth? Will anyone look beyond the numbers? More than a few contractors spend decades looking forward to the day they cash out. That's good. But when they get an unwelcome surprise as they try to retire, that's not so good.

The biggest mistake contractors make is they don't know their numbers, how their company will be valued and what they can do to increase the value of their company. But if you're looking forward to a final big payday at retirement, doesn't it make sense to make the check as big as possible?

Here are some methods I use to value a business on paper and based on potential. If you're selling, there are considerations for getting the best price. Keep in mind, though, that building up your business as a nest egg for retirement works best if you have been making the right moves through the years to maximize profits and make your business an attractive acquisition candidate.

There are two concepts to think about when valuing a plumbing, HVAC or electrical contractor. One is the reality of the business, where an accountant or a business valuation expert would look first. The other concept is the opportunity, which is my primary focus.

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