Preparing your roofing business for a stronger exit

By Jesse Sanchez. 

How early planning and strategic preparation can significantly increase business value when it’s time to sell. 

For roofing contractors, the strength of an exit often depends on the level of preparation done before a sale is even on the table. Many owners spend decades focused on production, customer service and growth. Far fewer spend that same time preparing their companies for a future buyer. According to Gokul Padmanabhan of HS Exit Advisors, that delay can directly affect valuation. Sitting down at The Coffee Shops™ sound stage during the International Roofing Expo (IRE), Gokul addressed the issues of this common pattern often seen among contractors nearing retirement. Owners may feel personally ready to step away, but their companies are not structured to attract buyers. 

“A lot of times the owner is ready, but the business is not ready,” he said. “80% of the time your business will not be ready while you’re ready because the technology and the strategy of operating a company is very different than getting your business buyer ready so you can maximize your outcomes.” That difference between operating a company and preparing it for sale is where value can either be gained or lost depending on the level of preparations made. Day-to-day operations focus on managing crews, closing jobs and serving customers. Exit preparation focuses on systems, strategy and reducing reliance on the owner. 

HS Exit Advisors, a boutique brand under its parent company American Business Exits, works with lower-middle market roofers to close that gap. While some businesses can be ready in about a year, most require 18 months to two years of preparation before going to market. The results, Gokul said, are measurable. “When you take time to prepare your company and realize that the strategy to prepare your company is different than the strategy to operate it,” he said, “we see almost a 22% increase in your sales price.” 

Exit planning should begin years before retirement. By preparing early and thinking strategically, owners can protect the value they have built and position their companies for a stronger financial outcome when it is time to sell. 

Watch the full interview to learn more about preparing your roofing business for a stronger exit and how early, strategic planning can help maximize long-term value!