Preparing to Sell or Acquire a Trade Business: Essential Steps and Market Insights for Roofing, Solar, HVAC, and Electrical Contractors

Kris Moe, an experienced author and advisor in the field of buying and selling trade businesses, has written extensively on the process of navigating acquisitions and sales for contractors. In this exclusive webinar, Kris will provide a practical overview of the steps involved, guiding participants through the essentials. All attendees will receive a complimentary copy of his latest book to deepen their understanding and support their own planning.

Preparing to Sell or Acquire a Trade Business: Essential Steps and Market Insights for Roofing, Solar, HVAC, and Electrical Contractors

• Welcome and Introduction:
  • Brief intro to the speaker's experience in M&A across the trade industries, highlighting roofing, solar, HVAC, and electrical as examples.
  • Webinar objectives: To guide business owners in trade industries through preparing for a sale, maximizing business value, and navigating the sale process.
• Why Now Might Be the Right Time to Sell:
  • Overview of current market trends across trade industries:
    • Demand Drivers: Aging infrastructure, increased focus on energy efficiency, electrification and evolving consumer expectations for sustainable solutions are impacting roofing, solar, HVAC, and electrical trades alike??.
    • Emerging Integration Opportunities: Growing intersections between trades (e.g., solar roofing, HVAC-electrical integrations) that boost company value by providing additional service lines?.

• Operational Tune-Up:
  • Emphasize the value of documented, efficient operations that can operate independently of the owner.
  • Tips for optimizing daily workflows, scheduling, and inventory management to enhance operational transparency across various trades??.
• Financial Clean-Up:
  • Importance of accurate, clean financial records. Highlight common buyer concerns with inconsistent revenue, profitability fluctuations, and debt, regardless of the specific trade?.
  • Financial readiness: Reducing debt, optimizing cash flow, and preparing detailed financial statements are universally critical for potential buyers?.
• Legal and Compliance Readiness:
  • Ensuring contracts with customers, suppliers, and partners are up-to-date and enforceable.
  • Emphasis on trade-specific certifications, safety compliance, and adherence to state regulations (e.g., HVAC licensing, electrical safety standards, solar permitting)??.

• Valuation Basics:
  • Overview of common valuation metrics for trade businesses, including EBITDA and SDE multiples.
  • Industry benchmarks typically range from 2x to 5x EBITDA, depending on the business’s size, profitability, and market presence??.
• What Makes Your Business Attractive to Buyers:
  • Key drivers of valuation across trades:
    • Recurring Revenue: Service contracts and maintenance agreements in HVAC, solar, or electrical add predictable income streams.
    • Market Position: Businesses with a strong local reputation or unique expertise (e.g., high-end residential installations, commercial contracts) command higher valuations??.
    • Diverse Service Offerings: Integrated solutions, such as solar + HVAC or EV charging installations, provide value-adding opportunities?.

• Types of Deal Structures:
  • Comparison of asset sales and stock sales with a focus on tax and liability considerations across trade businesses.
  • Strategies to bridge valuation gaps, including earn-outs and seller financing, that can make deals more accessible for buyers and sellers in trade industries??.
• Preparing for Due Diligence:
  • Overview of the due diligence process: highlighting financials, operations, and legal compliance checks that are critical in trades?.
  • Importance of transparency and pre-organization to streamline due diligence, which can shorten the deal timeline and prevent potential obstacles??.

• Planning Your Next Steps:
  • Considerations for a smooth transition, whether through staying on in an advisory role or preparing to step back entirely.
  • Financial and personal planning post-sale, including potential involvement in industry consulting, mentorship, or new ventures??.

• Open floor for questions, inviting attendees from any trade to ask specific questions or request additional information on topics covered.