Valuing a Masonry Contracting Business
The masonry industry is affected by the ups and downs of the construction industry, specifically the nonresidential building market. Unfortunately, during the Covid-19 pandemic, demand for commercial construction declined. This impacted the industry’s overall growth, declining 0.5% in 2020. As a result, the focus has shifted to residential. This is due to interest rates being at an all-time low and buyer demand being high. Masonries offer several services: bricks, blocks, concrete, stucco, slate, marble, granite, etc… This is a wide range of services, which means it is essential to have trained professionals doing the job. Whether you plan on buying, selling, or growing your business, it is important to understand the fair market value of a masonry business.
Several things can impact the value of a masonry contracting business. As a business appraiser, Peak Business Valuation works with many individuals who are buying or selling a masonry business. The first step in the buying or selling process is obtaining a business valuation. In the consultation process, we discuss key factors a valuation expert uses in valuing a masonry business. Keep in mind the factors below are only a guide. For specific information on your business, schedule a free consultation with Peak Business Valuation, business appraiser.
Market Multiples for a Masonry Business
- SDE Multiple Range: 1.69x – 2.73x
- EBITDA Multiple Range: 2.13x – 3.36x
- REV Multiple Range: 0.31x – 0.62x
**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.
The above are average valuation multiples for a masonry business. A valuation expert uses multiples when determining the value of a masonry business. For additional information see Valuation Multiples for a Masonry Business.
Learning about the worth of your business will help you begin increasing the value of your masonry contracting business. Increasing your business’s value is helpful whether you are growing, selling, or acquiring a new business. Below are a few ideas to help increase the value of a masonry business. If you would like a more detailed valuation, reach out to Peak Business Valuation, business appraiser, below!
Key Success Factors
Peak Business Valuation, business appraiser, values masonry businesses on the regular. Below are some success factors that increase the value of a masonry business and distinguish you from competitors. For more ideas see Value Drivers for a Masonry Business, How to Value a Masonry Company, and Valuation Multiples for a Masonry Business.
Low Owner Dependency
First, a valuation expert will consider the level of owner dependency. Low owner dependency will increase the value of your business significantly. Having a business run smoothly without complete reliance on one person is important to a highly valued business. For many masonry businesses, the owner is the main employee. If they don’t have trained professionals to work alongside them, the business can’t grow. Hence, taking steps to reduce owner dependence makes your business more transferable. The less dependent the business is on its owner the more sellable it becomes. For more information see Reducing Owner Dependency.
Employee Workforce and Training
Next, an essential piece to a masonry business is trained, qualified individuals. A business cannot grow if it is relying on one or two people. It needs qualified professionals who can do the jobs required. Masonry businesses tend to be family operated. Oftentimes, the business is passed down to a family member. This can make it hard to grow the business past the family members. For a masonry contractor to successfully sell their business, they need trained employees who can do the hard work required in this field.
Recurring Revenue
Last, one of the best ways to increase the value of a masonry business is through recurring revenue. This can be done in several ways but one of the best ways is to partner with building companies that need your expertise. Housing developments require consistent labor and masonry work. As the residential market has risen to 3.7% annual growth, masonry is in higher demand. Focusing on building recurring revenue will increase the value of your masonry contracting business. For more ideas see, Increasing Your Value Through Recurring Revenue.
Summary
There are many important things a valuation expert considers when valuing a masonry business. Whether you are buying, selling, or growing your business, understanding the value of a masonry business is essential. Obtaining a business valuation will help you understand the fair market value and discover opportunities to maximize the value of your masonry business.
Peak Business Valuation, business appraiser, values masonry contracting businesses across the country. For any questions about valuing a masonry business, please reach out. You can contact us by scheduling an appointment below.
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