The roofing business document most owners forget, until it’s too late

By Exit Stage Left Advisors.

The best time to create a protective buy-sell agreement is now, not when a crisis is already underway.

If you ask yourself, "What happens if I die, become disabled, retire, get divorced or simply want out?" and the answer lives in your head instead of on paper, it's time to revisit your buy-sell agreement.

Most roofing owners know what they want to happen. The problem is that wanting and documenting are two very different things. Who takes over the business? Who can buy the ownership? How is the company valued? Where does the money come from to fund the transition?

If those questions aren't clearly answered in writing, a future ownership transition can quickly become expensive, emotional and disruptive for your family, your employees and the business you've spent years building.

A buy-sell agreement is essentially a roadmap that outlines what happens when an owner exits the business. It establishes who can buy the ownership interest, how the company will be valued and how the transaction will be funded. 

For roofing companies with multiple owners, family members involved in the business or key employees expected to take over someday, this document can be just as important as any contract you sign with a customer.

A strong buy-sell agreement typically addresses:

• Retirement of an owner 
• Death or disability 
• Divorce 
• Voluntary sale of ownership 
• Business valuation methods 
• Funding mechanisms such as life insurance 

One of the biggest mistakes we see is owners waiting until a triggering event occurs before discussing these issues. At that point, emotions are high, circumstances are changing and everyone has a different opinion about what is fair.

The best time to create a buy-sell agreement is when everyone is healthy, aligned and focused on the future of the business, not when a crisis is already underway.

Even if selling your roofing company isn't on your radar today, building an "exit-ready" business means preparing for unexpected ownership changes. A buy-sell agreement helps protect your employees, your family and the value you've worked years to create.

At Exit Stage Left Advisors, we often tell roofing owners that the best exits are planned long before anyone is thinking about leaving.

To learn more about preparing your roofing company for the future exit, visit www.wesellroofers.com, where you'll find free resources and e-books on topics such as Buy-Sell Agreements, How to Pay Zero Taxes When You Sell Your Business and other strategies designed to help roofing owners maximize value.

If you'd like to discuss your situation or schedule a free consultation, email alex@esladvisors.com.