Value Drivers for Glass and Glazing Companies
The glass and glazing industry receives 72% of its revenue from work on office spaces, commercial and institutional buildings. Pre-pandemic, residential houses, and apartment buildings were the lowest revenue source. The Covid-19 pandemic attacked the commercial construction industry. Glass and glazing companies were forced to reevaluate their business plan. With residential construction booming because of low-interest rates, glass and glazing companies will experience a 1.9% annual growth over the next five years. As such, now is a good time to buy or sell a glass and glazing business.
Peak Business Valuation values glass and glazing companies that are buying, selling, or wanting to maximize the value of a glass business. As part of the valuation process, our professionals will discuss specific value drivers they use in determining the value of a glass and glazing business. Schedule your free consultation with Peak Business Valuation, business appraiser, using the link below.
Key Value Drivers for Glass and Glazing Businesses
Product & Service Mix
First, a business valuation will look at the product and service mix of a glass company. Residential and non-residential work are valued differently in valuation reports. This is because the costs of each project vary between commercial and residential. Our professionals will analyze the type of revenues your company incurs and compare it to industry standards. The valuation report will then determine a fair market value for the glass company. Through a business valuation, you can see where your glass and glazing business stands next to its competitors. Our business appraisers would love to talk more in detail about your business and its value. Schedule a free consultation today!
To have a successful business, you need reliable suppliers. These suppliers should supply quality products on time and in good condition. Having your products on time and in good condition creates positive customer interactions. When selling your business, make sure you have detailed reports of suppliers and the products they supply. Having a good relationship with your suppliers is key. It will increase the value of your business. In addition, the valuation analyst will look at the concentration of your suppliers and customers. Diversification is important to maximize the value of a glazing company.
Next, having a low owner-dependent business is an important key value driver. This is because the company has enough structure in place that it can function no matter who is running it. Creating a business that functions efficiently without the owner makes it more sellable. This includes having the right training in place. Buyers are more inclined to purchase a business that has low owner dependency. For more information, see Reducing Owner Dependency.
Creating a team that is experienced in the glass and glazing industry is important to success. This industry takes many individuals to get the job done. Doing the job right and on time is the best way to create positive relationships with construction contractors and customers.
Efficiency is an important piece to the glass and glazing industry as well. A team that does their job right and in good time will bring in more revenue and more clients. A business that relies solely on the owner to get the job done will not grow. To change this, consider hiring experienced employees or properly training the employees you currently have. Having documentation and putting the right structures in place allows the team to operate and handle each piece of the job independently.
Last, like the construction industry, recurring revenue is a very important value driver to the glass and glazing industry. This type of revenue is not owner-dependent, which makes it more valuable. Recurring revenue does not require continual marketing. Service contracts are extremely valuable when selling a glazing business. This type of revenue is very attractive to a buyer because it is easily transferable from one owner to the next. Recurring revenue also means the company is reputable. If a company can maintain service contracts, it establishes a positive reputation.
There are over 24,000 glass and glazing businesses in the United States. The pandemic in 2019 is changing the focus of this industry. Businesses must adapt if they want to survive. Residential construction is now bringing in an annualized 5.5% growth. This growth has made residential work the top priority in the glass and glazing industry. Glass companies that keep up to demand with market trends and create the right documentation and systems in place are the most valuable.
Peak Business Valuation is a leading business appraiser in the country. We provide business valuations for glass and glazing companies on a regular basis. For more information on key value drivers, schedule a free consultation to talk with a professional business appraiser.Schedule Your Free Consultation Today!