278 - Maximize Your Contractor Business Sale: How Private Equity Values What You've Built with Christian Olson

Wondering if your contractor business is ready to sell for top dollar? In this eye-opening conversation with investment banker Christian Olson from Footprint Capital, we uncover why 7 out of 10 business owners accept offers without knowing their true value - potentially leaving millions on the table. Learn exactly how to position your business for maximum value with a private equity buyer.What You’ll LearnWhy standardizing systems creates higher valuations (not lower ones)How to become a "platform company" and secure a second bite of the appleThe critical difference between business brokers and investment bankersWhy culture is the hidden value multiplier buyers scrutinize mostWhen (and who) to tell about your plans to sellTime Stamps00:14 - Discussing Business Deals01:18 - Impact of Interest Rates on Business Buying & Selling03:36 - Role of Investment Bankers06:54 - Understanding Private Equity10:59 - Steps to Getting Acquired14:14 - Importance of Company Structure17:13 - Standardization and Value Creation22:33 - Culture and Management in Business Deals28:06 - Understanding Business Valuation Multiples28:39 - Importance of Due Diligence30:49 - Case Study: Electrical and Plumbing Business32:52 - Becoming a Platform Company34:06 - Rollover Equity and Second Bite of the Apple35:45 - Preparing for a Sale to Private Equity38:41 - Common Mistakes in Business Sales41:59 - The Role of Culture in Business Success49:44 - Working with Footprint Capital54:25 - Episode OutroSnippets from the Episode"Seven to eight deals out of ten are sourced proprietarily, meaning no banker, no advisor. It's basically making that one-to-one handshake with the business owner." - Christian Olson"Being on ServiceTitan and being integrated across the board drives value because now you're trading expertise to the buyer. They're picking up something they may not have tried on their own." - Christian Olson"When you think you're unique, they're getting it from the guy next door. So you're standardizing that, but then it really boils down to execution. The software is just a tool." - Christian Olson"We've had several examples where the second bite of the apple is actually worth more than the first transaction." - Christian OlsonKey TakeawaysStart preparing for sale years in advance, not monthsStandardization beats customization for maximum valuationFinancial systems and proper accounting drive buyer confidenceCulture and employee empowerment are critical value driversBecoming a platform company creates exponentially more wealthManagement team preparedness directly impacts final valuationHaving an advisor typically pays for itself many times overResources⁠⁠24 Things⁠⁠ Construction Business Owners Need to Successfully Hire & Train an Executive Assistant⁠⁠Schedule⁠⁠ a 15-Minute Roadblock CallCheck out⁠⁠ OpenPhone⁠⁠Build a Business that Runs without you. Explore our⁠⁠ GrowthKits⁠⁠ Need Marketing Help? We Recommend⁠⁠ Benali⁠⁠Need Help with podcast production? We recommend⁠⁠ Demandcast⁠⁠More from Christian OlsonLinked InFootprint Capital WebsiteMore from Martin Holland⁠⁠theprofitproblem.com⁠⁠⁠⁠annealbc.com⁠⁠ ⁠⁠Email Martin⁠⁠⁠⁠Meet With Martin⁠⁠⁠⁠LinkedIn⁠⁠⁠⁠Facebook⁠⁠⁠⁠Instagram⁠⁠More from Khalil⁠⁠benali.com ⁠⁠⁠⁠Email Khalil⁠⁠⁠⁠Meet With Khalil⁠⁠⁠⁠LinkedIn⁠⁠⁠⁠Facebook⁠⁠⁠⁠Instagram⁠⁠More from The Cash Flow ContractorSubscribe to our⁠⁠ ⁠⁠⁠⁠YouTube channel⁠⁠Subscribe to our ⁠⁠Newsletter⁠⁠Follow On Social:⁠⁠ LinkedIn⁠⁠,⁠⁠ Facebook⁠⁠,⁠⁠ Instagram⁠⁠, ⁠⁠X(formerly Twitter)⁠⁠Visit our ⁠⁠website⁠⁠⁠⁠Email⁠⁠ The Cashflow Contractor