Business Valuation Blog | Understanding Buying / Selling a Company

A Good Estimate: Why Valuing a Construction Company is Vital to Growth

Posted by Business Valuation Specialists LLC on May 25, 2016 1:00:00 PM


In construction, we tend to think in terms of board feet, squares and yards of concrete. But what about the business side of your construction enterprise? Valuing a construction company is a vastly underrated practice that helps ensure your company will stay solvent for years to come. Why? Here are some ways you can use quality business appraisals to get more out of your business, reduce your overhead and improve your outlook.

A Good Estimate: Why Valuing a Construction Company is Vital to Growth

The construction industry is one fraught with risks to your business. From economic downturns to bursting housing bubbles to constantly shifting market prices, it's hard to stay ahead of the curve in construction. With today's rapid changes in economic growth, how do you stay ahead of it all? Though business owners often associate business valuations with selling or closing a business, these tools deserve a place in your business toolkit right next to your circular saw, impact driver and trusty old hammer.

Business valuations help you gauge your company's fiscal health and determine where it needs improvement. A qualified business appraisal specialist can spot areas in your operation that are wasteful of resources or opportunities to improve efficiency. They can take a look at your finances and determine whether you're able to continue in that fashion or whether you need to take a good, hard look at your cash flow situation.

A business valuation specialist can also determine where your company is strong and where it is weak. They can compare your operation to the industry average and suggest improvements. A certified business valuation appraiser can help you make good business decisions based on current market conditions.

A quality valuation also helps you determine the heath of the industry and current market as a whole compared to your company. A certified business appraiser spends their days appraising companies, so they have a good idea of how you compare to other businesses of similar size to your company.  You may also want them to perform an equipment appraisal to get a good understanding of the equipment value in case you are considering upgrading your fleet of equipment.

By valuing a construction company, you can ensure that your business will remain successful and avoid the worst risks the construction industry can throw at you. If you haven't determined the valuation of a company yet, what's holding you back?

Topics: construction company value, valuing a construction company