# Your Exit Strategy or Are Contractor Businesses Salable?



## Mr_Stop (Aug 15, 2016)

You typically don't need anything if its your own house (as was my case example) except permitting where required. While it might vary by municipality, I believe an electrical license is only required for commercial buildings. I'm not sure about plumbing and HVAC.


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## Mr_Stop (Aug 15, 2016)

TNTSERVICES said:


> He's talking about this. The devil is in the details.
> 
> View attachment 346417


Ah good catch. I forgot about those. It's a drain line for the expansion valve and I'm not worried.


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## Mr_Stop (Aug 15, 2016)

FrankSmith said:


> Seriously Mr. Stop. How many user names do you have. This is getting ridiculous. I know of at least 4.


Huh???


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## rselectric1 (Sep 20, 2009)

Was there a water meter bonding jumper there before? (Electrical thing)


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## Mr_Stop (Aug 15, 2016)

rselectric1 said:


> Was there a water meter bonding jumper there before? (Electrical thing)


No. Just bonded before the meter as originally installed in 1964.


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## Spencer (Jul 6, 2005)

EricBrancard said:


> The reason none of them sold is because there is really nothing proprietary about any of these businesses. If they closed up shop, another company could just hire their employees, take their customers and buy their equipment at auction.


To me, its the systems that create the value. 

I follow a guy who offers consulting to trade businesses like all of ours. He isn't selling a business but he is doing well selling his consulting and training small business on how to set up the systems to be profitable and save time. To me there is a lot more value in that than a business name and client list.


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## EricBrancard (Jun 8, 2012)

Spencer said:


> To me, its the systems that create the value.
> 
> I follow a guy who offers consulting to trade businesses like all of ours. He isn't selling a business but he is doing well selling his consulting and training small business on how to set up the systems to be profitable and save time. To me there is a lot more value in that than a business name and client list.


The systems are a great value to the people already in the business. But small construction companies really aren't all that appealing to investors. Like I said, there's nothing really proprietary. Whatever systems are in place could be easily replicated by someone else.


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## FrankSmith (Feb 21, 2013)

Mr_Stop said:


> Huh???


Just 1 user name?


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## Mr_Stop (Aug 15, 2016)

FrankSmith said:


> Just 1 user name?


Always was and is always is (on this forum and others). The only difference is sometimes it's just written mrstop. I'm really not here to shill, troll but came with a serious question. Sorry if you thought otherwise.


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## CarpenterSFO (Dec 12, 2012)

It's the wrong industry to talk about exit strategies. That's tech, or corner grocery stores, or underperforming commercial real estate assets, or etc., etc., but not construction, which is long-term, ridiculously cyclical, and built upon relationships, which aren't so easy to exit, in the end.

IMO.


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## lawndart (Dec 3, 2006)

New members get treated like trash around here. It's a shame the mods allow it.

I was told that the average multiplier in the construction business was 1.5 - 3 times net, when I sold my business a couple years back.

While learning the trade is important, you must be a good business person in this industry to become successful, just like any other.

Don't let others tell you differently. With your business background, you already have the advantage over most in this industry.


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## Calidecks (Nov 19, 2011)

All of us were new members at one time.


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## mtb (Oct 11, 2012)

It is a little rough to get started on this forum, but I think a lot of that is a reflection of attitudes on the jobs site. Being the new guy isn't easy and if you show up on the job asking old hands about retirement on the first day you'd probably get the same treatment, or worse...

I started building because I had passion for the work and developing as a craftsman. When I work on a job with kids who are in it for the money, I have the same reaction. 

Money and exit strategy are good things to think about but not my prime motivator. If they were I would probably have followed a different path.


Sent from my iPhone using Tapatalk


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## Calidecks (Nov 19, 2011)

If a guy asks, "what time is break?" At 7am, on his first day, we're probably going to have issues!


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## JBM (Mar 31, 2011)

You would need to run a much different business than a contractor would. It would have to be a land developer, maybe office building developer/malls. You would have to have a group of guys you can rely on. 

To think you can run a business as a sub in either the new construction or homeowner space you will get crushed. You need to be the one putting deals together, hiring people to build stuff for you. Attention to detail and like you said a strong business background can accomplish quite a bit with a financial backing for learning the ropes.


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## mtb (Oct 11, 2012)

My std response to younger guys is, "if you want to make money in the trades become a plumber". 

I could see a plumbing company with good systems and some maintenance contracts being worth something. Without the owners involvement. 


Sent from my iPhone using Tapatalk


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## rselectric1 (Sep 20, 2009)

If you randomly ask a worker on a job "what he's doing" you'll get one of 3 general responses.


I'm laying brick.
I'm making $28 per hour.
I'm helping to build a house.

Which guy would you want to keep around?


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## FrankSmith (Feb 21, 2013)

lawndart said:


> New members get treated like trash around here. It's a shame the mods allow it.
> 
> I was told that the average multiplier in the construction business was 1.5 - 3 times net, when I sold my business a couple years back.
> 
> ...


What did you sell that business for? I am a skeptic. In my mind I remember that you claim that was a flooring business. I also somehow feel that I picked up that you still target floors in your new business. Unless you relocated to a new region I feel there is something fishy about how serious of a sale this was.


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## FrankSmith (Feb 21, 2013)

FrankSmith said:


> What did you sell that business for? I am a skeptic. In my mind I remember that you claim that was a flooring business. I also somehow feel that I picked up that you still target floors in your new business. Unless you relocated to a new region I feel there is something fishy about how serious of a sale this was.


Meaning how many dollars not what reason.


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## FrankSmith (Feb 21, 2013)

lawndart said:


> New members get treated like trash around here. It's a shame the mods allow it.


That was not my experience when I joined.


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