Value Drivers for a Masonry Business
The masonry industry includes work like stone setting, bricklaying, brick-to-glass block layering, and exterior marble, granite, and slate work. This type of work goes hand in hand with the construction industry. The pandemic caused a decrease in demand for commercial work. As such, residential work became increasingly popular. Low-interest rates encourage consumers to build or buy. This is creating a large market for residential masonry work. As such, now is a great time to buy or sell a masonry business.
Understanding what drives the value of a masonry business is essential to success. Whether you want to buy, sell, or maximize the value of your masonry business, value drivers impact all three. A great way to learn specific value drivers for a masonry business is by obtaining a business valuation. Our business appraisers at Peak Business Valuation will discuss specific value drivers for masonry during the valuation process. A business appraisal will also help you understand what your masonry business is worth.
Value Drivers for a Masonry Business
There are over 90,000 masonry establishments across the United States. With that many businesses, it is important to offer specialized services. Masonries offers several types of services. This gives ample opportunity for a business to set itself apart from the rest of the competition.
Another way to increase specialization is to be the number one service provider in a geographic area. This is more achievable as most masonry businesses cover small geographic locations. Specialization and quality service are essential to successful masonry businesses. A valuation analyst will consider competing providers and how you differentiate from them when valuing your masonry business.
Working with quality suppliers provides several benefits to masonry businesses. This can include receiving supplies on time, confidence in the quality of products, and the ability to resolve any issues that might come up during shipment. Working with good suppliers is crucial when selling a business. A buyer will want to be comfortable buying a business that has an equitable reputation with high-quality suppliers.
A business appraisal will also consider supplier concentration. One or two suppliers increase risk as such it is best to diversify or at the least have backup suppliers.
Next. masonry requires detail-oriented and trained individuals to do the job. On average, the number of employees per masonry business is 2.4. With this number being so low, it can be difficult to grow a business. An owner who prioritizes training and hiring trained individuals will increase revenues. This gives the business more opportunities to sign service contracts. The more trained employees you have on your team, the more revenue the masonry company can bring in. Revenue has a direct impact on the value of a masonry business.
Next, an important value driver for a masonry business is recurring revenue. To receive recurring revenue, your company can sign service contracts with individuals and businesses such as housing developers. Recurring revenue is valuable because it easily transfers from one owner to the next. It is also valuable because it does not require increased marketing efforts. As such, less time and money are required to market to new clients.
When receiving a business valuation, a third-party valuation company such as Peak Business Valuation will value recurring revenue higher than a one-time service. This is because recurring revenue is a continual income and brings consistent profits. If you have questions about the value of your masonry business, please contact us by scheduling a free consultation.
Low Owner Dependency
Oftentimes, masonry is a family-owned business with the owner being the main employee. This creates high owner dependency and little room for growth and development. A masonry business that does not rely solely on the owner will be worth more than those that do. This is because the work can continue no matter who is running it. For a masonry business to grow or be the most valuable when selling, it needs to bring on trained individuals who can do the job with or without the owner. For more information see Reducing Owner Dependency.
When selling a business, a potential buyer will look for a high-functioning, low owner-dependent business. To prepare to sell your business, consider receiving a valuation from Peak Business Valuation, business appraiser. Schedule a free consultation today!
There are many ways to increase the value of a masonry business. Focusing on the key value drivers will benefit your business the most. Whether you want to buy, sell, or grow the masonry business you already own, value drivers will help you do that. Obtaining a business valuation will help an owner know what drives the value of a masonry business.
A third-party professional such as Peak Business Valuation, business appraiser, values masonry businesses across the country. A business appraisal determines the value of a masonry business. It will also identify the strengths and weaknesses of the masonry business. Peak Business Valuation, business appraiser, is here for all your valuation needs. Schedule a free consultation using the link below. For additional information see, Valuing a Masonry Contracting Business as well as Valuation Multiples for a Masonry Business.
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