32-Year Commercial General Contractor, Toledo Ohio

$1.9M

Revenue

$753K

SDE

2.7x

Multiple

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Full Editorial Writeup

This is a 32-year-old commercial general contractor based in Toledo, Ohio, operating since 1994. The business provides a full suite of general contracting services for commercial projects and comes with a substantial equipment package valued at roughly $578,000 that is included in the asking price. It runs lean with four full-time employees and one part-time staffer out of a modest 1,800 square foot leased facility at just $1,300 per month.

The headline number here is the margin profile. On $1.89M of revenue, the business throws off $753K of owner cash flow, a 40% owner-earnings margin that is exceptional for general contracting, where single-digit to low-teens margins are the norm. That math almost always signals a heavily owner-dependent operation where the seller is estimating, bidding, managing projects, and maintaining key relationships personally.

The owner is retiring and the business is priced at $2M, a 2.66x cash flow multiple. With $578K of that price sitting in hard equipment, a buyer is effectively paying around $1.42M for the operating goodwill and cash flow, which reframes the multiple considerably once you net out the tangible assets.

Why we like it

The earnings quality on paper is strong: $753K of cash flow on $1.89M of revenue is a 40% margin, which is roughly triple what a typical general contractor earns. If even part of that holds up under a new owner, the sub-3x multiple is attractive on a cash-on-cash basis.
Thirty-two years of operating history in a single market builds real durability through reputation, repeat GC relationships, and a known name among local subs and commercial clients. In construction, that track record is often the difference between winning bids and being the low-ball unknown.
The included equipment package is worth about $578K, which means a meaningful portion of the purchase price is backed by hard, resaleable assets. This provides genuine downside protection if the operating business stumbles during transition.
The overhead structure is remarkably lean: five employees and $1,300 a month in rent. That low fixed-cost base is exactly what you want in a cyclical business, because it gives the operation room to survive lean quarters without bleeding cash.

How to improve it

Map every source of the current cash flow immediately to understand how much depends on the owner personally bidding and managing jobs. The first 90-day priority is documenting the estimating process and client relationships so revenue survives his exit, because a two-week handoff on a 40%-margin owner-run shop is dangerously thin.
Build a project management and estimating bench by hiring or promoting a lead who can run bids without the owner. Owner-dependence is the single biggest value leak here, and transferring that knowledge is the highest-leverage move a buyer can make.
Pursue recurring or repeat-revenue work such as facility maintenance contracts, tenant improvement programs, or preferred-contractor agreements with commercial property owners. Converting even a slice of one-off project work into retained relationships smooths the inherent lumpiness of GC revenue.
Expand service capacity to capture larger or additional concurrent projects now that equipment is already owned. With fixed costs this low, incremental revenue should drop to the bottom line at a very high rate.
Formalize the sales pipeline and lead generation beyond the owner's personal network, adding a basic CRM and outbound bidding process. Right now the backlog and bid pipeline appear undocumented, which is both a risk and an untapped growth lever.
Renegotiate or extend the facility lease well before the December 2027 expiration, given only one 12-month option remains. Locking in space certainty protects operations and removes a near-term unknown for the buyer.

Diligence notes

Scrutinize the 40% cash flow margin line by line, because it is far above industry norms and almost certainly reflects uncompensated owner labor across estimating, PM, and sales. Add back a realistic replacement salary for every role the owner fills to find the true transferable earnings.
Demand the current backlog, signed contracts, and bid pipeline, along with three years of job-level revenue. General contracting is project-based with no recurring revenue, so the value hinges entirely on what work is committed and what the win rate looks like going forward.
Analyze customer concentration across the last three years of projects. A shop this size often has a handful of repeat commercial clients driving the bulk of revenue, and losing one or two with the retiring owner could materially impair the business.
Verify the $577,896 FF&E and equipment valuation with an independent appraisal and confirm it is owned free and clear with no liens. Since this hard-asset value underpins the downside case, its condition, age, and resale value matter directly to the deal economics.
Assess transferability of licensing, bonding capacity, and insurance. Commercial GC work often requires surety bonds tied to the owner's personal track record and financials, and a buyer needs to confirm bonding can be maintained post-sale.
Confirm the reason and timing of the owner's retirement and negotiate a longer transition than the offered two weeks. For an owner-centric contractor, a 6-to-12 month consulting arrangement or earnout tied to retained relationships would substantially de-risk the acquisition.

Source

Originally listed on BizBuySell. View original listing →