3 Things I'd Focus on if I Had to Build a Sellable Business Again

After building and selling two service businesses, here are the only three things I'd focus on if I had to start over.

I get asked about this a lot. Owners want to know what it's like to sell a restoration business, what the process looks like, and how much you can actually get for it. They want to know what multiple of earnings a restoration company like theirs can command, and whether the timing is right.

Those are all fair questions.

But the most useful question, the one that would have helped me most when I was still running the business, is this: what actually made it worth buying in the first place?

Because here's what I've learned from being on both sides of that transaction. The things that make a buyer say yes have almost nothing to do with how busy you are or how good your reputation is in the market. They come down to a handful of fundamentals that most owners aren't paying attention to until it's too late to do anything about them.

The Business Had to Be Able to Run Without Me

This is the big one. When I sold my restoration company, the buyer needed to know that it wasn't going to fall apart the day I walked out the door. That meant having real systems in place. Documented processes. A team that knew how to do the work without me being on every job or every call.

I see a lot of restoration owners who are in the business. Everything runs through them. They're the best salesperson, the best project manager, and the person the adjusters call when there's a problem. That might feel like job security. To a buyer, it looks like a liability.

If the business depends on you personally, it's worth a lot less than you think. That was hard for me to hear when I first started understanding it. But it changed how I ran the company.

The Financials Had to Tell a Clear Story

A buyer is going to look at your numbers. Not just your revenue. Your gross profit by division. Your job costing. Your accounts receivable aging. Your net income trends over three to five years.

What I've seen, working with restoration business owners over the past 17 years, is that most restoration companies are making money. They just can't prove it. The financials are a mess. Costs are miscategorized. Jobs aren't being tracked properly. The P&L doesn't match what's actually happening in the business.

When I sold, I had clean books. I knew my gross profit margin. I knew which divisions were profitable and which ones weren't. I knew my overhead as a percentage of revenue. That gave the buyer confidence. And confidence is what drives valuation.

We Had Consistent, Documented Profitability

Not one good year. Consistent profitability over time. That's what buyers are paying for.

Restoration business buyers typically pay a multiple of EBITDA, which stands for earnings before interest, taxes, depreciation, and amortization. If your numbers are clean and your profit is consistent, that multiple goes up. If your books are a mess or your profit swings wildly from year to year, it goes down, or the buyer walks.

I've worked with owners who had a great year and assumed the timing was right to sell, only to find that one strong year doesn't tell buyers nearly enough. They want to see that the profit is real and repeatable. That it's not tied to one big job or one lucky referral source.

Getting there takes time. That's why I always say the best time to start thinking about your exit is five years before you actually want to make it. Not because you're rushing toward the door, but because building the kind of restoration company that commands a real multiple takes consistent work.

The AR Was Accurate

This one surprises people. But a buyer looks at your accounts receivable the same way a bank does. And what they want to see isn't just a low number. They want to see a report they can trust.

What I mean by that is this. I want to be able to hand my AR report to someone and have them make collection calls without having to second-guess what's on it. No balances showing up because we invoiced before the work was finished, where the client doesn't actually owe us anything yet. No negative balances where deposit money came in but wasn't applied correctly, making it look like we owe them money. No mystery entries that only make sense if you already know the backstory.

Those things happen when the bookkeeping discipline isn't there. And when a buyer sees an AR report full of noise, it tells them your invoicing process is inconsistent, your collections are unreliable, or both. In the restoration world, where you're fighting with adjusters and waiting on supplements and dealing with slow-paying TPA programs, keeping AR accurate is harder than it sounds. But it matters when someone is determining what your restoration company is worth.

The Bottom Line

I sold a business that I was proud of. Not just because of the number, but because of what it took to get there. It required years of discipline around the financials, years of building systems, and years of developing a team that didn't need me for everything.

If you're thinking about selling your restoration business at some point, even if it's five or ten years away, the time to start building toward it is right now. Not because the market is right or the timing is perfect, but because the things that make your restoration company worth buying are the same things that make it worth owning.

If you want to talk through where your business stands and what it would take to get it there, reach out. That's the kind of conversation I'm happy to have.