Build a stronger business before it is time to sell

By Jesse Sanchez. 

Six business-building practices that can help roofing contractors strengthen operations, increase enterprise value and prepare for an eventual exit. 

For roofing contractors thinking about the future of their business, exit planning does not have to begin when they are ready to sell. On this episode of Roofing Road Trips®, Karen Edwards spoke with Gokul Padmanabhan of H.S. Exit Advisors about the "dig a moat, build a castle" framework and why owners should begin preparing long before an exit becomes urgent. 

According to Gokul, readiness starts with the owner. Contractors should pay attention when their enthusiasm for running the business begins to fade because waiting too long can make an eventual sale more difficult. Reflecting on his own experience as a business owner, Gokul explained, "I think the sooner you come to that realization, the higher you can sell your business for when it's actually on top and the better outcomes you got for the next chapter in your life." 

Preparation also means regularly understanding what the business is worth and whether it is positioned for sale. Rather than waiting for a life event to force the decision, owners can make exit readiness part of their ongoing planning. Gokul advised, "Just like you go get a physical or you get a blood test every year, you have to value the company every year. You have to make sure how ready it is as part of your planning." 

Drawing from more than 600 transactions completed by his firm, Gokul identified six behaviors common among top-performing companies: embracing an owner's mindset, mastering financials, focusing on customers, maintaining a profit-first perspective, developing engaged and satisfied employees and creating a bold vision and mission. 

The owner's mindset is especially important. Rather than focusing only on scheduling jobs, ordering materials and solving daily problems, contractors can step back and consider the company as an asset that should become more valuable over time. Gokul encouraged owners to begin with a simple exercise, saying, "Take one hour on a Friday, take a long lunch and really just sit down and look at where you want the business to be three years from today, where you want it to be two years from today, where you are now and what are some of the big things that are going to take you from where you are to where you want to be." 

Whether an exit is approaching or still years away, these practices can help contractors create stronger businesses, make more informed decisions and build greater flexibility for the future. 

Listen to the podcast or Watch the conversation to learn more about how the "dig a moat, build a castle" framework can help prepare your roofing business for a stronger future and eventual exit!