How to Value a Glass and Glazing Business
The glass and glazing industry cuts and installs windows, glass doors, skylights, curtain walls, and sunroom additions in commercial and residential buildings. This industry is closely related to the construction industry. Throughout the pandemic, nonresidential construction demand has decreased while the residential side has increased. Low-interest rates are reeling in the consumers even during a pandemic. Whether you plan on selling a glass and glazing business or buying one, it is important to understand the fair market value of a glass and glazing business.
There are several factors that affect the value of a glazing business. As a business appraiser, Peak Business Valuation works with individuals across the country who are buying or selling a glass and glazing business. The first step to either of these processes is obtaining a business valuation. As part of the valuation process, our professionals will discuss some of the key factors used in valuing a glass business. Please remember, these factors below are only a guide. For specific information on valuing a glass and glazing business, schedule your free consultation with Peak Business Valuation, business appraiser.
Market Multiples for a Glass and Glazing Business
- REV Multiple Average: 0.31x – 0.62x
- SDE Multiple Average: 2.12x – 2.83x
- EBITDA Multiple Average: 2.92x – 4.24x
**Disclaimer: These multiples are for educational purposes only. As such, the information provided does not constitute valuation advice. These multiples do not represent the valuation opinion of Peak Business Valuation or its valuation professionals. Instead, seek the guidance and advice of a qualified business valuation professional about any matter in this article.
To increase the value of your glass business, you first need to understand the worth of your business or potential business. Knowing a business’s value is helpful whether you are buying, selling, or expanding your current business. Here are a few ideas to help increase your glass and glazing business’s value. For a detailed valuation, schedule a free consultation with Peak Business Valuation, business appraiser.
Key Success Factors
Peak Business Valuation, business appraiser, values glass and glazing companies on a regular basis. Below are some of the key success factors that can help your business excel. These factors will impact the value of a glazing business.
Product and Service Mix
As mentioned above, the glass and glazing industry coincides with the construction industry. Construction contractors partner with glass and glazing companies to add important fixtures to their developments. These fixtures are essential to the structures. Residential and non-residential projects differ from one another, which means they are valued differently in a business appraisal. A valuation professional will analyze the different revenues coming in from residential and non-residential.
This industry relies heavily on trained individuals. This profession takes many hands to get the job done and if not done properly, the mistakes are very obvious. Having a quality team is very important to a potential buyer. A buyer wants a glass and glazing business that can operate efficiently. Creating a quality team will also reduce owner dependency. A business that relies heavily on the owner is not valued high. This is because the entire business relies on one person. Having a quality team allows the business to function without reliance on one person. If one person is sick or quits, the business doesn’t have to shut down for the day, it can continue on as usual. This is very important to a successful business. For more ideas see, Reducing Owner Dependence.
Suppliers and Concentration
Working with quality suppliers that deliver materials on time and undamaged is a very important success factor. The seller should have detailed reports of their suppliers and ensure their products are up to standard for the consumer. Having quality materials that are on time is essential to positive customer interactions. To ensure you receive recurring revenue, make sure your suppliers are someone you can trust. The most valuable businesses have strong supplier relationships and don’t just rely solely on one supplier. High supplier concentration increases the risk for a potential buyer as such it decreases the value of a glass business.
As mentioned above, recurring revenue is especially important to this industry. The less time spent marketing your company is more time spent building solid customer relationships. Recurring revenue will raise the value of your business because it is easily transferable to a new owner. A buyer will look for these types of revenues when considering a purchase because it means the company is reputable and less owner dependant.
There are many important things to consider when valuing a glass and glazing business. Understanding the value of your business is necessary when you are looking to buy, sell, or grow your business. Obtaining a business valuation can help you understand the fair market value and identify opportunities to maximize the value of a glass and glazing business.
Peak Business Valuation, business appraiser, values glass and glazing businesses across the country. For specifics on your business, feel free to reach out via email. Our professionals would love to value your business and help you understand what impacts the value of your business. We look forward to working with you.
Schedule Your Free Consultation Today!