Plumbing is an industry that is always in demand. Whether you’re working on new construction or dealing with an emergency situation, the value of having reliable and comprehensive plumbing services cannot be overstated. As a plumbing business owner, you know this all too well. You’ve likely spent time on weekends and holidays answering calls, keeping up with ongoing projects, and perhaps even landing a dedicated commercial contract or two. While you appreciate the clientele and experience you’ve built, you might be entering a time where you’re wondering, “how to sell my plumbing business.”
The plumbing industry in Canada remains incredibly profitable, with revenue expected to top $18.5 billion in 2023. The industry’s market size is also expected to increase by 1.5%. Given these figures, you might start looking at how to value your plumbing business for sale. However, selling a business can be a complex process, and knowing how to get the best price for your hard work is important. In this blog post, we will outline the steps you need to take to sell your plumbing business and highlight the advantages of working with a broker.
Table of Contents
- 4 Steps to Selling Your Plumbing Business
- What Can I do to Increase the Value of My Plumbing Business?
- How Long Does it Take to Sell a Plumbing Business?
- What Can a Broker Do for Me?
- Get More Value with Sunbelt
4 Steps to Selling Your Plumbing Business
You might be ready to sell, but that doesn’t mean it will happen overnight. There are a few steps you need to take to ensure things are in order for a smooth transition. These are as follows:
1. Prepare Your Plumbing Business for Sale
Financials are the biggest part of any business deal. If the dollars and cents don’t add up, attracting potential buyers and selling your plumbing business can be a daunting task. So, before you put your plumbing business on the market, you must ensure that it is in a good financial state. Your broker can help you gather relevant documentation and follow up with any necessary paperwork should buyers show interest. Most importantly, you’ll want to review payroll and invoices since these are likely the most significant financial records. It can appeal to buyers if you have software to keep track of everything, but well-organized and detailed paperwork stands up even without it. Once you’ve put your books in order, you can move on to the next step with greater confidence in the sales process.
2. Build a Team of Advisors
Choosing to sell your plumbing business is a big decision that warrants careful consideration. You’ve likely taken the time to consult with family and loved ones to understand that this is the best move for you fully. However, you’ll also want sound professional advice to ensure everything is done correctly and will benefit you in the long run. As such, you’ll want to contact your attorney, accountant, and business broker to assist you in navigating the complexities of the sales process.
This is especially important if you lack prior experience in selling a business. These experts can help you assess the market, determine a prime time to sell, and provide advice throughout the process. Even after new owners acquire your company, they can ensure they settle into daily operations comfortably and prevent any negative kickback post-sale. By leveraging their professional expertise, you can confidently proceed with the sale of your plumbing business, knowing that your interests are being safeguarded.
3. Get a Business Valuation
To determine the value of your plumbing business, you need to get a business valuation. This will enable you to establish a realistic asking price that is reflective of the business’s true worth. For a fair and accurate valuation, you’ll want to consider financials and other factors, such as location, clientele, licenses, and overall brand reputation. A broker can objectively examine your business and see the green and red flags. Their valuation should be able to stand up to questions and concerns from buyers or other brokers and accurately depict the overall worth of your plumbing business. If you’d like to fetch a higher valuation, we expand more on that below.
4. Find Buyers
Once you have prepared your plumbing business for sale, built a team of advisors, and determined its value, you need to find potential buyers. When you hire a business broker, they can take care of this step for you through their streams of networking and advertising. At Sunbelt Canada, we consider the seller’s confidentiality of the utmost importance. We take the time to ensure that the business is seen by the right people who have been vetted and are qualified to be considered potential new owners. If there is any need for additional paperwork or documentation, we’ll provide it on your behalf while you continue to run your company. This can take significant stress off your shoulders and keep the process moving forward even as you take on new projects.
What Can I do to Increase the Value of My Plumbing Business?
Our valuation may turn up some details that could point to ways where you can increase the value of your plumbing business. Whether you pursue these updates or changes is up to you, but they can help if you are looking to get top dollar for your company.
Depending on how long you have owned your plumbing business, it might be difficult to identify weaknesses. In such cases, a broker can help by comparing your services to those of plumbing companies they have helped sell in the past. These might include factors such as:
- Improving your pricing structure.
- Increasing your customer base.
- Expanding your service offerings.
- Growing your online presence.
- Providing exceptional customer service.
You and other plumbing businesses in your area compete for only so many customers. So, to ensure buyers see the value of your plumbing company, review the positive potential of including one or more of the factors listed above.
Outdated branding can potentially deter customers and, by extension, buyers from your plumbing business. Consider taking the time to work with a designer to revamp your logo and website and strengthen your social media presence. Word-of-mouth referrals are great, but investing in branding can yield long-lasting benefits in terms of attracting new clients.
Company branding can also include your trucks. Well-maintained vehicles with appropriate logos are more appealing to buyers. From there, consider increasing brand awareness, such as offering clean-up services or taking precautions to minimize intrusiveness in clients’ everyday lives. Once customers clearly understand your plumbing business, buyers will too.
Invest in New Systems
Plumbing equipment, tools, and systems have undergone significant advancements in the past 20 years. If you’ve been in business that long or simply haven’t kept up with new technology trends, it might be time to do so. Selling your plumbing business is about attractiveness to buyers, and they’ll appreciate initiatives like greener practices such as eco-friendly products or services. These can also appeal to clients looking to lessen their environmental impact without compromising on their need for quality services. You may consider modern solutions such as adding tankless and solar water heaters, central stack plumbing layouts, or greywater recovery systems to help your business stay competitive and attract buyers.
Plan a Growth Strategy
Even without you as the owner, your plumbing business needs to remain profitable and grow accordingly to increase its overall value and buyer interest. Implementing growth strategies is a practical approach to accomplish this, because they lay the foundation for future plans that a new owner can adapt to suit their needs. Your broker will encourage you to examine your business’s growth trajectory thus far and assess its potential direction in the future.
Expanding your service offerings, entering new markets, or increasing your marketing efforts can all be a part of your growth strategy. While making this plan, ensure you also have a financial model for the future. This should identify past finances and use them to predict future economic success. These plans may make sense in the next six months or the next few years, but buyers should be able to see the value in having them in place.
Invest in Marketing
Finding more clients and diversifying your customer base can help increase your plumbing business’s overall value. In this regard, marketing is essential. Once you’ve enhanced your company’s branding, invested in new systems and planned for growth, marketing can help put all of your efforts together. You might consider investing in SEO practices to increase awareness online or going the route of advertising. In some cases, direct mailers can be helpful, especially in newer neighbourhoods or ones that have been a part of a hot real estate market. Whatever you choose, an investment in marketing will return its worth to you in the long run.
Invest in Your Staff
Having a valuable plumbing business is only possible with great staff. As a business owner, managing all the jobs alone is not feasible, and the same holds for a potential buyer. No matter how you got to the team you have, investing in your staff means a more seamless transition after you sell. Consider supporting your most tenured and senior employees in achieving a higher-level licensing required for certain plumbing jobs. Similarly, enabling other team members to upskill or train for certifications can also increase the value of your plumbing business. No matter the buyer’s qualifications, they should be able to take over once the deal is done with minimal work needed.
How Long Does it Take to Sell a Plumbing Business?
Once you’ve decided to sell your plumbing business, you’ll want to contact your advisors, such as your accountant and lawyer, to alert them of your decision. Next, you’ll want to consider hiring a business broker to handle all of the details throughout the transaction. From here, the size of the business, the state of the market, and the complexity of the sale will all factor into how long it will take to sell your plumbing business. For most small and medium sized-entreprises, it can take anywhere from six to twelve months. At Sunbelt Canada, we prepare business owners for this timeline by ensuring they have an exit plan and add as much value to their businesses as possible in that time.
What Can a Broker Do for Me?
We hear this sentiment a lot from business owners looking to sell. While we’ve laid out some key points in this article, the reality is a business sale transaction is a complex and complicated process. It can take months to assemble the appropriate documentation, make necessary internal changes, and even find a buyer. A broker can handle all those details and provide invaluable perspective as you enter the negotiation phase. Your broker will be in your corner, capable of giving objective opinions but still understanding the points that matter most to you. From a legal and regulatory perspective, working with a broker means everything will be done by the book. Overall, a business broker allows you to experience selling your plumbing business with ease, securing you a fair price that will carry you through to your next venture or into retirement.
Get More Value with Sunbelt
If you are considering working with a business broker, it is important to thoroughly research and evaluate different options to ensure you find one that aligns with your specific needs and goals. Sunbelt Canada has a strong track record of successfully completing transactions across a variety of industries and business sizes, including plumbing businesses. Our services include business valuations, marketing, negotiations, and closing assistance. We have a team of experienced brokers can help you get the best price, navigate the sales process and ensure a successful sale. Ready to make the transition and sell your plumbing business? Contact us today.