Every contractor dreams of the big exit—selling the business they spent decades building for a life-changing sum. However, the reality of the market is stark. According to Claudio Vilas, founder of The Roofing Biz Broker, less than 10% of roofing companies are actually sellable today.
Many owners believe that high revenue equals high value, but a business that generates cash isn’t necessarily one that investors will buy. If you are doing everything yourself, you don’t have a business; you have a job.
Here is a breakdown of why most acquisition outreach is meaningless, why businesses fail to sell, and how to position your company as an investment-grade asset.
1. The Two Killers of Valuation: Bad Financials and Owner Dependency
If you want to sell, you must understand what professional buyers actually look for. The two primary reasons deals fall apart are messy financials and the owner’s involvement in daily operations.
- Financials: Most owners run their books to minimize taxes, often using cash accounting. However, buyers need accrual accounting to see the real story of the business’s profitability. If your Profit & Loss (P&L) statement doesn’t accurately reflect revenue recognition or separates variable costs (COGS) from fixed expenses, buyers will walk away or offer significantly less.
- Transferability: A business is only sellable if it is transferable. If you are the top salesperson and the project manager, the business effectively stops when you leave. To get a premium valuation, you must have standard operating procedures (SOPs) and a team in place so the business runs without you.
2. The Best Time to Sell Is Before You’re Ready
A common tragedy in the home services industry is the owner who waits too long. Vilas warns that “the best time to sell is before they feel ready to sell”.
Waiting until you are tired, sick, or facing an economic downturn can wipe out your equity. Vilas shares a heartbreaking story of a client who rejected offers when his business was thriving, only to develop a terminal illness a year later. Because he took his foot off the gas and his health declined, the business stopped making money, and a 20-year legacy became worthless in months.
Selling when the business is trending up allows you to “hedge” against future uncertainty, such as health crises or economic recessions.
3. The “Second Bite of the Apple” Strategy
For those willing to stay involved for a few years post-sale, selling to Private Equity offers a massive upside known as the “Second Bite of the Apple”.
Here is how it works:
- The Roll-Up: You sell your business to a larger firm or private equity group but reinvest (“roll over”) 10% to 30% of the proceeds into the new parent company.
- Risk Reduction: You are no longer a standalone risky asset; you are part of a diversified group (e.g., a conglomerate with locations in Florida, Texas, and New York), which hedges against regional weather events and stabilizes revenue.
- Compounding Growth: The parent company improves operations, lowers costs, and increases the EBITDA multiple. In 5 years, that rolled-over equity could be worth two or three times your initial reinvestment—sometimes equaling the payout of the first sale.
4. Don’t Go It Alone: Build a Deal Team
Selling a business is likely the largest financial transaction of your life, yet many owners attempt to DIY it or rely on bad advice from social media.
Professional buyers are dealmakers who have done this 50 or 100 times; they have teams of M&A lawyers, acquisition accountants, and tax strategists working to get the best deal for them. To level the playing field, you need a mirroring team. Vilas advises owners to prepare a list of due diligence questions for the buyer to ensure alignment on vision, employee treatment, and legacy.
5. The Role of Tech and Marketing
Finally, technology acts as a multiplier for valuation—but only if used correctly. Buyers will look inside your CRM (like JobNimbus or AccuLynx) to see if you know your true cost per job.
Similarly, you need “smart marketing” that proves your growth is sustainable. If you can’t explain why you grew or attribute it to specific marketing levers, buyers will view your revenue as risky. A strong marketing plan and clean data turn your business into a predictable machine rather than a lucky gamble.
The Takeaway
Even if you don’t plan to sell for years, start running your company as if you are selling it tomorrow. Fix your accounting, fire yourself from daily tasks, and build a transferable asset. As Vilas notes, if you have a business that makes money today, you should position it to sell today—because you never know what tomorrow holds.
