Build a stronger restoration business before a sale

By Jesse Sanchez. 

Peer insight, benchmarking and disciplined preparation can help contractors strengthen operations and position their businesses for a future transaction. 

Preparing a restoration business for sale involves more than organizing financial statements. HS Exit Advisors emphasizes that contractors also need to consider how positioning, operational discipline and timing can affect the strength of the business when they are ready to pursue a transaction. 

Les Cunningham, founder of Business Networks Inc., has spent more than 55 years helping contractors build profitable, accountable businesses. He points to mastermind groups as one of the ways contractors can gain candid insight from trusted peers without bringing local competitors into the conversation. Describing the need for that kind of environment, Les explained, “A lot of contractors want to be able to talk to somebody and they can't because they don't trust that the other people are going to tell them the truth. So we've invented a process where we have a meeting in a total trusting relationship and allow people to talk about what they do, but we don't allow geographic competitors in the room.” 

Within those groups, members can compare financial performance, observe one another’s operations and identify areas for improvement. Business Networks uses a 14-category benchmarking framework that allows restoration contractors to examine performance line by line, including estimating accuracy, gross margins, project management efficiency, labor utilization, overhead control, marketing return on investment and customer retention. Emphasizing the value of seeing how other contractors operate, Les noted, “Talking to other contractors in the business, they find out information they wouldn't get any other way. They can trust, but they also verify what they've been told and really know what's going on in the company.” 

That level of scrutiny can help contractors make substantive operational improvements before they enter the market. Preparation also extends to the sale process itself, where engaging multiple qualified buyers, establishing clear deadlines and using professional representation can create a more structured approach than negotiating with a single interested party. 

Even as contractors evaluate financial performance, systems and potential buyers, Les stressed that the fundamentals of running a strong business remain consistent. Reflecting on those enduring priorities, he said, “Some basic principles of business never change. You've got to make a profit. You've got to treat your employees well. Those things, they don't change.” 

For contractors considering a future sale, strengthening day-to-day operations, learning from trusted peers and understanding business performance can create a stronger foundation long before a transaction begins. 

Learn more about how benchmarking, peer accountability and disciplined preparation can help contractors build a stronger restoration business before a sale!