278 - Maximize Your Contractor Business Sale: How Private Equity Values What You've Built with Christian Olson

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The Cash Flow Contractor

Benali

281 episodes

3 days ago

If you’re like most contractors we know, then you started your business because you’re passionate about and great at your craft. You also wanted to be your own boss. Owning a business has a lot of advantages, but also a lot of challenges. We started this podcast to talk about things that matter to you as an owner, like business fundamentals, sales processes, marketing, leadership, and much more. Armed with knowledge, you’ll be able to reach your goals, whether that’s growth, getting your shop to run without you, or anything in between.

Management

Business

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Management

Business

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278 - Maximize Your Contractor Business Sale: How Private Equity Values What You've Built with Christian Olson

The Cash Flow Contractor

58 minutes 1 second

3 weeks ago

278 - Maximize Your Contractor Business Sale: How Private Equity Values What You've Built with Christian Olson

Wondering if your contractor business is ready to sell for top dollar? In this eye-opening conversation with investment banker Christian Olson from Footprint Capital, we uncover why 7 out of 10 business owners accept offers without knowing their true value - potentially leaving millions on the table. Learn exactly how to position your business for maximum value with a private equity buyer.

What You’ll Learn

Why standardizing systems creates higher valuations (not lower ones)
How to become a "platform company" and secure a second bite of the apple
The critical difference between business brokers and investment bankers
Why culture is the hidden value multiplier buyers scrutinize most
When (and who) to tell about your plans to sell

Time Stamps

00:14 - Discussing Business Deals
01:18 - Impact of Interest Rates on Business Buying & Selling
03:36 - Role of Investment Bankers
06:54 - Understanding Private Equity
10:59 - Steps to Getting Acquired
14:14 - Importance of Company Structure
17:13 - Standardization and Value Creation
22:33 - Culture and Management in Business Deals
28:06 - Understanding Business Valuation Multiples
28:39 - Importance of Due Diligence
30:49 - Case Study: Electrical and Plumbing Business
32:52 - Becoming a Platform Company
34:06 - Rollover Equity and Second Bite of the Apple
35:45 - Preparing for a Sale to Private Equity
38:41 - Common Mistakes in Business Sales
41:59 - The Role of Culture in Business Success
49:44 - Working with Footprint Capital
54:25 - Episode Outro

Snippets from the Episode

"Seven to eight deals out of ten are sourced proprietarily, meaning no banker, no advisor. It's basically making that one-to-one handshake with the business owner." - Christian Olson
"Being on ServiceTitan and being integrated across the board drives value because now you're trading expertise to the buyer. They're picking up something they may not have tried on their own." - Christian Olson
"When you think you're unique, they're getting it from the guy next door. So you're standardizing that, but then it really boils down to execution. The software is just a tool." - Christian Olson
"We've had several examples where the second bite of the apple is actually worth more than the first transaction." - Christian Olson

Key Takeaways