3 considerations when selling your business

By Emma Peterson. 

The industry is constantly consolidating and shifting through sales and mergers, learn how to know when the time is right to sell or join larger companies. 

In an episode of Roofing Road Trips®, Heidi J. Ellsworth spoke to Randy Korach about Roofing Corp of America (RCA)’s tips for companies that are looking to sell or join larger companies. Randy is their current CEO, but he has spent his fair share of time on the other side of the table too, specifically with his contracting business, Innovative Roofing Group (IRG), which he eventually sold to Soundcore Capital Partners. He explained three key points to the sale process.  

1 – Keep your options open 

The first thing Randy touched on was the importance of listening to multiple offers. He explained, “If they're even getting to a point in their career or their business lifecycle that a transaction might make sense, they should listen to a variety of folks talk about what they're up to because there are a lot of different approaches.” There are a lot of mergers happening, both in the residential and commercial areas of the industry and it is important to find the business partner that is right for your business. 

2 – Alignment is key 

One of the things you need to pay attention to when looking at different buyers’ approaches is goal alignment. Some owners may choose to just exit immediately, but there is a lot of value lost in that scenario. Randy explained, “Some buyers provide sellers an opportunity to invest forward alongside them in the future value creation of the business.” This drives alignment, both the seller and the buyer want the best for the company as they both maintain a vested interest in it. And that vested interest turns into, as Randy described, “A massive value and wealth creation opportunity.” The owner’s sale of that business is not the last income they receive from it if they align their goals with the buyer by investing. 

3 – Talk to an advisor 

Randy strongly advised that potential sellers consult an advisor before making decisions. He elaborated, “Any potential sellers should get professional advice about, ‘Where are multiples for transactions? Is this fair? Is this market?’” This is important because every situation is unique and has its own challenges. If a seller rushes into things, it can cause problems further down the line. Randy recalled, “People get a call. They hear enough in that call that they take the next step with a seller. They don't open the process to multiple buyers.” 

Read the transcript or Listen to the whole episode to learn more about the RCA and selling a business.