Want To Sell Your Construction Business Someday- Consider These Buyer Types Today
In a previous blog about selling your construction business I had suggested business owners write a for sale ad describing the business they plan to sell in the future. In this blog I describe the two typical construction business buyer types that became obvious to me as I worked towards selling my business. By considering your target buyer you can make better decisions about what to do and put in place as you build your business to get it ready to sell.
First is the investor.
This person will want to buy a business that pretty much runs on its own, needing little hands-on attention from the buyer. This buyer will be looking for time tested systems and industry best practices already in place and well documented. This buyer will also be looking for a business that already has technology and software in place to proactively predict and measure business activities. This buyer will also be looking to keep most or all of the existing employees in place. To attract this buyer type make sure you assemble a great team of high performing and self directed employees who work well together and embrace the systems and technology you will put in place.
This investor buyer will need a leader/manager to run the company. Before offering your business for sale to this buyer type I suggest you transfer the leadership and the day to day management of your business to a well qualified employee over a period of time. During the evolution you can test and prove his/her effectiveness as a general manager in advance of selling. By taking adequate time to accomplish this important consideration at my business both me and my employees felt good about and respected the new leader, before I fully transitioned out of the day to day.
Some key advantages of selling to an investor can include a high selling price assuming you have a great business with future growth potential. And, this buyer will also have the funds or can get his/her own financing for the purchase. My experience proved this could be a great way to go, but due to the reputation of our industry, the pool of potential buyers was very limited. I think this is still true today, but may not be the case in the future.
The second type of buyer will be the owner operator.
Likely an entrepreneur, this type of buyer will want to take over an existing business and jump right in physically working in the business. This buyer will want to see steady profits and a strong customer list, but as an entrepreneur with energy to burn will also be looking for growth potential.
Having systems and employees in place will be important, but you might want to assume that this buyer will likely change or evolve the systems you have put in place. As a result the employees described above might not like and/or agree with the changes. In particular experienced management employees may not tolerate any loss of the independence they have already earned in performing their day to day roles. If you plan to sell to this type of a buyer, I suggest you assemble employees who desire to follow a leader and will go with the flow.
Also consider selling to this type of buyer will not command as high a price when you sell. On the other hand you will likely find more potential buyers because of the lower price.
The best of both worlds?
The sale of my business was in several ways a hybrid of the two models described above. I ultimately sold to my general manger. He had already earned the leadership role and had participated for many years in the direction, growth and day to day management of the business. All of the practical experience he gained during that evolution prepared him to be a well trained, experienced and motivated candidate to buy and continue growing the business. To make the purchase practical I had to finance the sale. In my case I felt financing the purchase was worth the risk because the buyer had proven his competency, trustworthiness and ability to not only maintain the business, but also grow it in a strategic and manageable way.

Since selling my remodeling business in 2004, many remodelers have asked me for help and insight about how I did it and how they too could sell their businesses some day. They ask great questions. The challenge is that there is no easy one size fits all answer. In this article I will share a few big picture considerations to help guide you. In a follow up article I will discuss typical buyer types you can consider as possible prospects to sell to.
If you’re considering selling your business some day you will need to consider the types of buyers out there as well as their typical motivations for buying one business versus another. In my next blog I will discuss the two typical buyer types you will want to consider as you make you plan and write your for sale ad.
In the design industry we have many challenges besides meeting the concerns, wants, and needs of our precious clients. Many businesses have resorted to marketing on the basis of something for free. It prompts clients to want what is offered for free, however, at the same time, causes the knee jerk reaction question to arise, “How can it be free, what’s the catch”?
This poses itself as one of the challenges most noteworthy; the honest perception of value that is created. For a certainty, most trends are to downplay, for market segmenting purposes, the true value of reputable trades or product.
To advertise something for “free” in reality means something else needs to recoup the costs related to the “free” product or service. This is, in all respects, “Bait and Switch” by offering something for free that really isn’t. Doing so may call into question being honest in our business dealings.
Lowest cost marketing is not being honest in business dealings, as it may not spell out the true reason something is less, or much less, as many products and services, on the surface, appear to be the same. The adage, “You Get What You Pay For”, is usually visited after the disappointment comes, once the bargain fails to meet the expectation and the delight for the savings is replaced by the sinking feeling, “I’ve been had again”. As designers, is this really the outcome we want our clients to experience, let alone, having to deal with it once exposed?
Most remodelers, but certainly not all, rely heavily on referrals and repeat customers as they grow their businesses. This may keep a contractor doing a low volume of work busy, but relying so exclusively on referrals won't be adequate if you want to become a construction business owner, break the $1Million installed sales threshold and develop a constantly growing business.
There are many customer types out there all with their own expectations when it comes to working with a remodeler. Successful remodeling businesses are those that strategically decide who they will be and who they will serve. If you choose to work for people who buy on price and expect more than they are willing to pay for, you will get more work from them. And because people tend to hang out with other people just like them, your past customers will refer you to more customers just like them. Before you do marketing to grow your business decide and define who you want as your customer. Also, think about the project types that make sense for the business you want to develop and grow. For example pull and replace kitchens and bathrooms may not be sexy or all that challenging to you, but remember you are building a company and a team of employees to complete what your company decides to sell. If you decide to build complicated and or highly detailed projects you will need the appropriate systems and staff to estimate, sell and produce that level of project to the expectations of your targeted client type. Choose wisely.
Your marketing should serve two very important purposes. The first is to help your target customer type(s) find you. The second is to convert leads into sales. The marketing tactics you use should support these two goals. One marketing tactic that can be really effective at accomplishing both could be your company web site. For example, done well, SEO can be used so prospects searching online for certain services and contractor types can find your business, and find it on the first page of search engine results. Goal #1 achieved. But once you get them to your site you also need to differentiate your business from other businesses in the marketplace 
For large ticket, complex projects face to face presentations are generally preferred simply due to the scope of the project. But if I have done my job correctly up to the point of presentation, I should already have the job. I should have already established whether they can afford the project and if they have selected my company. The bid is just a formality. Price is WAY at the bottom of issues, as is the method of delivery. For most projects, we would have already met multiple times up to the point of presentation and that’s where I do my selling. Whether I email the quote or hand deliver it is immaterial in my experience of selling projects for over 15 years. I personally prefer a face to face meeting, but have found it unnecessary in most instances and base that decision on the customer and their personality. I have never been the cheapest bidder and tell people up front that I never intend to be. Yet my closing rate/ratio remains extremely high.
I find that our current speed of living in general is much faster than in the past and people get irritated with too many required face to face meetings. They most often prefer the email method so they can make a decision at 10pm after work is done, the kids are asleep and they can focus. Am I serving them or are they serving me? I always ask what their preferred form of communication is and then I respect that. If I have established myself as the contractor of choice, reflected in our discussions (phone or otherwise) that I have accurately heard them and understand their needs/wants, established a comfortable budget, and minded the details, why waste their time and mine with an unneeded additional meeting? Let’s do this!
If like Milt you disagree with something I post at my blog please feel free to let me know. Milt did a great job explaining his viewpoint in a respectful and thoughtful way. I must admit I agree with his approach as well. When Milt emails his proposal he is doing so to confirm in writing the agreement he has already made with his prospect who has agreed to become a customer. Milt is certainly not an order taker, but rather a great example for other contractors seeking to improve their sales abilities and results. 





Another opportunity to differentiate yourself, your business and your solution and become a trusted advisor.
If you are having challenges selling jobs and or getting the price you need to earn a good living and 
To help your work stand out from other contractors don’t settle for the same old same old when it comes to designing driveways for your clients. You can mix and match materials like asphalt and brick border, or broken concrete and gravel. Instead of a straight path from the street to the garage, consider a rolling driveway layout to add some sensuous curved lines to the property.
Guest Blogger: Heidi Cardenas is a freelance writer with a background in human resources, business administration, technical writing and corporate communications. She specializes in human resources, business and personal finance, small business advice and home improvement.

For many home owners choosing the right contractor to work with is just as important as the quality of the workmanship. Consumers who have already done remodeling and had a bad experience with a contractor are great candidates for this tactic. The purpose of the tactic is to get them talking about what happened last time, how it affected them, and how they will feel if the same thing happens again. With this prospect first ask something like: “Is there a reason you aren’t working with the contractor who did your…?” If this reveals you are on the right track says something like “Why haven’t you already hired one of the other contractors you have met with so far.” Then, depending on their answer and the context, consider saying something like: “Were you hoping I could do something different than the other guys?” Now, at least with this prospect, you’re back in sales mode! Move to tactic #3.

The outside perception is what prospects come to think about your business by what they observe, much like looking at a picture.
In a lot of ways testimonials are like referrals. If contractors wait for them to happen they will get some referrals and some business. On the other hand, if contractors are proactive in causing them to happen and are strategic about causing the inside reality they include, contractors can get great customers and a lot more business.





