Page 21 - LBMAO - Reporter Jan-Feb 2023 - web optimized

oes this sound familiar? You are sitting of building supplies. Customers had difficulty their business, but they do not know how
Din your office after a lengthy discussion shopping and they became very demanding. to proceed with selling that business. Many
with a long time staff member who has been This led to a high degree of frustration. The building materials businesses are sold either
offered a signing bonus if they leave your supply chain issues that developed from this to competitors or to other existing dealers/
organization and move down the street to surge in business have also increased the suppliers. The assistance of a business-
a competitor. They are currently paid at the level of burnout in business owners. Uncertain broker can help value the operation and its
top of the comparable salary range for that time frames added to customer and staff assets properly. A broker can also build the
position but someone else wants to give them exasperation. When or if, a product would number of potential customers who would
more. Earlier this morning you had a long arrive was a challenge. Owners did or could be interested in acquiring the business. If you
discussion with your insurance provider about not take holidays to unwind and reduce the have several customers, this can help increase
getting coverage for a driver on your yard staff stress. All these stresses became couped up the selling price.
who is under 25 years old. You are frustrated and lead to exhaustion and a reduction in the The time frame for a building materials
with the way your business is performing passion for the business. business sale is somewhat dependant on the
and the coming year does not look like it will The great resignation of 2021/2022 operation. If the financial reports and data are
improve. Is this the time to sell your business? has many business owners rethinking their up to date and in-order it can take as little as
reasons for continuing to operate. It has three months to execute a sale. Most sales
Reasons for selling increasingly become a challenge to fill roles will take 3-9 months of work before the sale
There are a variety of reasons that an in all areas of the building materials industry. happens. Some of this also depends on the
entrepreneur may desire to sell his/her Trained, knowledgeable employees are outside partners that are needed. These
business. One of the top reasons can be for difficult to find and keep. Salaries for new include banks, lawyers, accountants, tax
retirement where you may not have a suitable hires have increased at a rapid rate with some planners and vendor partners. Each of these
successor. Other reasons for selling can be groups need time and it will always seem
from a lack of passion for the business, the to take longer if you are in a hurry. If the sale
business may have a lack of liquidity or the needs to close near the end of a calendar year
business may have reached the point where "Selling your business is not the or if inventory checks need to be done before
continued growth does not meet with the same as posting a for sale sign in proceeding, that will increase the time frame
current owners goals. If you find yourself in as well.
any of these categories, it may be time to look the front window and hoping that The value of the business is one area
at selling. buyers will come. Each building that is particularly troublesome for most
Retirement is a common reason for selling entrepreneur business sales. The adage “that
for many businesses in the building materials material business sale has staff, something is only worth what someone is
field. Many of the owners are reaching the customers and suppliers that will willing to pay for it” still rings true. In selling
point in their life where they would like to your business it is important to have as many
experience something different from the be affected." prospective buyers as possible so you can
grind that operating their own business maximize what someone is willing to pay.
brings. They may want to travel, play golf, If you only have one competitor or dealer
garden, or spend time with family and friends. staff being offered signing bonuses, like pro valuing your business, you may/will be
This industry is aging. According to BuildForce athletes, to change teams. Every building leaving money on the table. Many building
Canada, the average age in the construction materials business need quality employees to materials sales look at the book value of the
workforce will be 41 years old in 2027. It operate efficiently. assets, the value of the inventory and the
also expects that 20% of the workforce in total of the good accounts receivable when
this industry will be lost due to retirement Things to consider before the sale setting the value of the business. The value
by 2027. The construction industry is much There are a number of items that need of good-will and the brand that you have built
like the building materials industry with an to be considered before putting a for sale is tougher to define and subsequently gets
aging group of owners. If there is not a family sign on your business. These include the devalued. Here is a good reason to have a M &
member or current staff member who would time frame of the sale, how to value the A advisor to help communicate the intangible
be deemed suitable to carry on the business, business, how to promote/advertise the sale value of the business you have built. It will
then the business owner would need to look of the business, and how do you keep the sale cost you some money in commissions but that
outward to sell the business. confidential. can be diffused if they can grow the overall
Burnout is another of the reasons that may A business sale is often only done once value of the business. Just like selling your
lead to a business sale. Every entrepreneur in an entrepreneur’s lifetime. In many cases home, a good broker can grow the selling
created their business with a passion to be the amount of money involved is substantial. price by attracting more suiters.
successful. Many business owners have lost We spoke with Nitin Khanna of N3business, a Selling your business is not the same as
their passion and feel burned out. COVID-19 merger and acquisition advisor, specializing posting a for sale sign in the front window and
has had a huge effect on building material in business sales in the building materials/ hoping that buyers will come. Each building
business. It stressed staff – things got construction industry. He feels that most materials business sale has staff, customers
remarkably busy for retailers and suppliers business owners are great at operating and suppliers that will be affected. Hanging

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