Exit Planning for Contractors: A 24-Month Roadmap

The contractors who achieve the best exits don't stumble into them. They engineer them — methodically, over 18–24 months — by making deliberate decisions about their financials, operations, team, and customer base that systematically increase what a buyer is willing to pay.

This roadmap is the framework we use with clients who engage us well before they're ready to go to market. Follow it and you'll arrive at the transaction table in a position of strength.

Months 1–3: Establish Your Baseline

Get a Market Valuation

Before you can improve your exit value, you need to know where you stand. A market-grounded valuation tells you your current EBITDA, your likely multiple range, and the specific gaps between where you are and where premium buyers want you to be.

Assemble Your Advisory Team

You'll need: an M&A advisor (us), a CPA who understands business transactions (not just tax prep), and a transaction attorney. Get these relationships in place early — not in the middle of a deal.

Audit Your Financials

Pull three years of P&Ls, balance sheets, and tax returns. Identify every owner add-back. Find the discrepancies. Start separating personal expenses from business expenses now so your financials are clean well before diligence.

Months 3–9: Build Transferable Value

Launch or Expand Your Service Agreement Program

This is the single highest-return investment you can make before a sale. Recurring service agreements and maintenance contracts directly increase your EBITDA multiple. A business at $2M EBITDA with 35% recurring revenue will trade at 1–2 turns higher than the same business with 10% recurring. Over 6 months, aggressively convert one-time customers to agreement customers.

Reduce Owner Dependency

Document your role. Then systematically delegate or hire for each function you currently perform. A buyer wants to buy a business — not buy you a job. If your name is on every major customer relationship and every hire/fire decision, that's value destruction in a buyer's eyes.

Document Your Processes

Write or record SOPs for your core operational processes: dispatch, technician onboarding, customer callbacks, billing, job costing. These documents demonstrate that your business is a system, not a collection of people doing things from memory.

Months 9–18: Strengthen Revenue Quality

Address Customer Concentration

If you have one or two customers representing more than 15% of your revenue, this needs to change before you go to market. Buyers will heavily discount — or walk — on concentration risk. Invest in marketing and sales to diversify your customer base.

Build Out Your Management Team

The most valuable organizational addition you can make is a general manager or operations director who can run the business day-to-day without you. This single hire often increases your sale price by more than their annual salary within the first year after sale.

Clean Up Your Balance Sheet

Pay off or address personal loans, related-party transactions, and unusual liabilities. Buyers will find everything in diligence — better to address it proactively than to negotiate around it under time pressure.

Months 18–24: Go-to-Market Preparation

Commission a Quality of Earnings Report

A Quality of Earnings (QoE) analysis — conducted by a third-party CPA — validates your EBITDA and add-backs before buyers run their own diligence. Sellers who provide a QoE report close deals faster and with fewer retrades.

Prepare Your CIM

The Confidential Information Memorandum is your business's investment pitch. It should tell a compelling story: your history, your market position, your financials, your team, and your growth opportunity. Your M&A advisor prepares this — but the raw material comes from you.

Time Your Go-to-Market

Ideally, go to market immediately after a strong year — never mid-year during a dip. Work with your advisor to identify the ideal timing based on your TTM financials and current market conditions.