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Many successful contractors, installers and service providers have excellent customer relationships and solid historical financial performance. These are obviously very important and positive factors in negotiating the highest possible sales price for your company, though buyers will often stress the lack of "hard assets" in an attempt to lower the price.
Here are several tactics that Gerber & Company, LLC has successfully used to address these issues during purchase price negotiations:
- Emphasize repeat business from existing customers, even though the company may not have guaranteed long-term supply agreements. This will give prospective buyers confidence in your future revenue streams.
- Distinguish between projects driven by new contruction versus moves/adds/changes at existing locations. We have found that a large portion of most contractor's business is tied to modification of existing installations. This gives buyers confidence that a reduction in new office construction will not have a material and adverse impact on your order flow.
- Conduct post-installation surveys so you have hard data on customer satisfaction. High-levels of customer satisfaction almost always translates into new business in the future; by quantifying this intangible asset you can give prospective buyers confidence in your team.
- Stress the quality of your management team, which presumably would remain with the company even after the acquisition. It would be very expensive for a new firm to hire and build a comparable group.
For further information please contact Gerber & Company, LLC CEO Ron Gerber at 212-812-2311 or at rgerber@angelbeat.com
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