Selling a Specialty Trade Contractors Business

A specialty trade contractor is usually valued based on the cash the business reliably generates for an owner, with adjustments for true one-time or personal expenses you ran through the company. The number moves a lot based on whether you can prove job margins, produce clean WIP, and show the business runs without you solving every field problem. Retainage and slow collections can also push value down because the buyer needs more cash to float jobs. You can start with Rejigg’s free valuation calculator, then tighten it up with real job examples and WIP support.

No. You don’t need a broker to sell a specialty trade contractor, and giving up 5–10% of the sale price is tough to justify when buyers mainly want your WIP, job-cost proof, and a clear story on foremen and cash collection. Rejigg gives you vetted buyer access, digital NDAs, a secure data room, and deal tracking so you can run a real process yourself. Start with the preparation guide and build your buyer-ready package.

Most specialty trade deals close in a few months, but the calendar is driven by how quickly you can answer job margin, WIP, billing, and retainage questions with clean backup. When WIP is inconsistent or job files are scattered, diligence slows down, and buyers start building discounts into their offers. You can speed this up by having a monthly WIP snapshot, 3–5 job walk-throughs, and a retainage schedule ready on day one. Rejigg keeps NDAs, documents, and buyer Q&As in one place so you’re not restarting for every buyer.

Often, yes. SBA 7(a) loans are common in contractor acquisitions, but the lender will dig into your tax returns, add-backs, and whether cash flow can cover payments while you wait on pay apps and retainage. If your working cash swings a lot month to month, the lender may push for a bigger down payment or more conservative terms. It also helps if you can show WIP that ties to the financials and a clear collection pattern by GC. You can model payments with Rejigg’s SBA loan calculator before you negotiate.

Buyers usually ask for three years of profit-and-loss statements, balance sheets, and tax returns, plus current-year monthly financials. In specialty trades, they also want WIP support, backlog, accounts receivable aging, and a retainage schedule, because that’s where “profit on paper” can drift from cash reality. Expect a buyer to reconcile job-level performance to your books and to ask about big swings month to month. Rejigg’s due diligence checklist lays out the usual request list in plain English.

Working capital is the cash and near-cash the business needs to make payroll, buy materials, and keep crews moving while you wait to get paid. Buyers usually ask for a “normal” amount of this cash cushion to be left in the business at closing, so they are not funding your old jobs. If you carry high retainage or have slow-pay GCs, the required cushion is usually larger. When you’re comparing offers, focus on both price and how much cash the buyer expects you to leave behind. Rejigg’s deal tracking dashboard shows working capital asks side-by-side.

Retainage gets handled by putting it on paper: who collects it when it releases, and who does any remaining closeout work needed to trigger release. Some deals leave pre-close retainage with the seller to collect later, and others treat it as part of the cash needed to run the business, with a working capital target at closing. The right approach depends on how disciplined your closeouts are and how much retainage is outstanding. Put a job-by-job retainage schedule in your data room so buyers can underwrite it, then negotiate the treatment using the deal negotiation guide.

Seller financing means you receive part of the purchase price over time, like you’re making a loan to the buyer, instead of getting everything at closing. It shows up a lot in specialty trades because it helps buyers meet lender requirements, and it gives them comfort that job margins and collections are real. The trade-off is you carry risk if the buyer mismanages crews, billing, or customer relationships. If you consider a seller note, pay attention to the down payment, payment schedule, and what happens if the buyer misses payments. Rejigg’s offer comparison view lets you see seller notes and terms side-by-side.

An earnout is a portion of the price you only get paid if the business hits future targets, often tied to revenue or profit after closing. In specialty trades, earnouts come up when job profitability is hard to prove, the owner is central to winning bids, or collections timing is uncertain. They can work, but they also get messy if the buyer changes pricing, staffing, or job selection, and your payout depends on results you no longer control. If an earnout is on the table, get the exact measurement rules and reporting expectations in writing before signing.

Most buyers look at equipment and vehicles through an operational lens: what must be in place on day one for crews to produce, and what replacements are coming soon. Older vans can be fine if uptime is solid and maintenance records are real. Revenue-driving specialty gear usually matters more, like lifts, trailers, test equipment, jetters, or any tool that makes a crew faster or lets you do higher-margin scopes. A clean equipment list also avoids last-minute fights about what’s owned, leased, or personally titled. Put the list in your Rejigg data room and label those details clearly.

A common transition is 4–12 weeks of structured handoff, then limited availability for bigger questions. Buyers usually want introductions to key GC contacts, help transferring estimating and pricing knowledge, and time with the foremen and PMs who actually keep jobs moving. If the owner has been the person fixing inspections, paperwork issues, and crew problems daily, the transition often stretches because the team needs a new rhythm. Set expectations early about hours, responsibilities, and what counts as an “emergency.” The transition planning guide helps you define this.

If the license is tied to you as the qualifying party, buyers will want a continuity plan before they get serious. Sometimes, the buyer already has a qualifier, and other times, a key employee steps into the role, but either way, there are timing rules that can affect closing. Make a simple list of every license by state or city, who holds it, and how permits get pulled today. Put the licenses and renewal dates in your data room and raise this early, because it’s a common reason deals stall late.

Most owners wait until they have a serious buyer and a realistic path to closing, because early rumors can spook foremen and top techs. Buyers still need a plan for retention and communication, especially for the people who run the field day-to-day. A practical move is to identify your “must-retain” list, understand what keeps them here, and think through pay, role clarity, and timing before you announce anything. Rejigg’s buyer vetting and digital NDAs help you keep the process quiet until you choose to share it.

Taxes depend on how the deal is structured and what you are selling, such as assets like equipment and vehicles versus ownership in the company. Specialty trade contractors also run into real-world wrinkles like equipment depreciation and how WIP and retainage are treated around the close date. Two offers with the same headline price can net you very different after-tax proceeds. This is worth running with your CPA early, while you still have leverage to negotiate structure. Rejigg helps by keeping offer terms organized while you and your advisors compare scenarios.

A strong contractor data room usually includes financial statements and tax returns, current-year monthly financials, WIP and backlog, job-cost samples, accounts receivable and payable aging, and a retainage schedule. Buyers also want contract samples, change order examples, insurance and claims history, fleet and equipment lists, and an org chart that shows who runs crews and paperwork. Many will ask for licensing and bonding if you use it. Rejigg provides a built-in secure data room so you can control who sees what and when, without emailing attachments.

Start by packaging what serious buyers ask for early: 3–5 job walk-throughs, a current WIP snapshot that ties to billing and retainage, a backlog view that matches crew capacity, and a plain-English explanation of how you bill and collect. Then, protect your time by using a structured process with confidentiality controls, so you’re not chasing tire-kickers for weeks. Rejigg is built for broker-free sales with buyer vetting, digital NDAs, direct messaging, and scheduling so you can talk to qualified buyers directly. See finding buyers.

Reasonable terms usually protect the buyer from you immediately taking back key customers or poaching field leaders, while still letting you earn a living. What’s enforceable varies by state, and in specialty trades, the relationships can be personal, so vague restrictions tend to create unnecessary conflict. Most buyers care about GC relationships, the foremen who hold production together, and any niche service lines you personally sold. Ask for the exact geography, time period, and who you can and can’t solicit, in writing, early in the process. Have an attorney review it before you accept “standard” language.