Looking to Buy - Electrical Contractor

[cmwarner2003]

Good afternoon, I have been in the trade for 20 years and responsible for running (2) companies between 20-40M. I am looking to buy a mid sized EC and grow it as my own. Does anyone have any experience in finding an EC for sale, or how they usually structure the buy out? Any input would be helpful.

 

[mtnelect]

Good afternoon, I have been in the trade for 20 years and responsible for running (2) companies between 20-40M. I am looking to buy a mid sized EC and grow it as my own. Does anyone have any experience in finding an EC for sale, or how they usually structure the buy out? Any input would be helpful.

If you leave California, you can't go back, too expensive. Same for owning your own business, once you are self-employed you can't go back. When things start to get rough, you start to think about the pay days you had. Having a boss tell you what to do, doesn't work anymore. What is that saying "Once you seen Paris ..."

 

[ramsy]

looking to buy a mid sized EC and grow it as my own

Check for BK filings in the area you want.

 

[AC\DC]

Just keep in mind people hire contractor because of personal relationships they have formed.
once A new owner come they may jump ship.
Good employees might not like the new owner or new company policy and quit.
It’s not like buying a retail shop

 

[petersonra]

Any company is as much about the personal relationships between the owner and his customers, employees, suppliers, bankers, etc. If you buy the business you will have to cultivate those relationships and that takes time.

You will want to have plenty of cash to tide you over while you figure things out. After you buy a business like this, you run a serious risk that key people will leave and so will key customers.

I do not think a bankrupt business is a good place to start unless you have experience in such things. There is a reason it is bankrupt.

You can structure a buyout anyway that you and the owner agree on.

You should probably hire a good business attorney and CPA to help you along this path. They will be worth their weight in gold at keeping you safe from the various financial traps buying an existing business entails.

And keep in mind running an existing business does not mean you have the skills to own one

 

[curt swartz]

If you leave California, you can't go back, too expensive. Same for owning your own business, once you are self-employed you can't go back. When things start to get rough, you start to think about the pay days you had. Having a boss tell you what to do, doesn't work anymore. What is that saying "Once you seen Paris ..."

What does than have to do with the OP???

 

[petersonra]

Some other things that have occurred to me. If you are really "running" a 40 million dollar a year business, you are probably making a quarter million or more a year in salary plus bonuses. If you are not making that kind of money, it suggests to me you either don't know what you are really worth or you are not really "running" anything.

No bank is going to fund your purchase or your operating cash needs unless you put a big chunk up yourself. I am guessing you would need to put in two to five million of your own money to swing such a deal.

 

[ramsy]

I do not think a bankrupt business is a good place to start unless you have experience in such things. There is a reason it is bankrupt.

Business value doesn't sell with variable clients or short-term project books, but takeover's that use old soldiers don't need marketing gimmicks to steal clients from existing rivals, or wait for new arrivals to get started.

If not a restructure BK, assets may be liquidated or auctioned at discount, rather than sold at prime business valuation.

If not a restructure, and employees haven't moved on, client book may be courted with some familiar faces.

 

[petersonra]

I think you are in a fantasy. Once a business goes into bankruptcy unless someone is willing to finance them while they restructure, the business itself is done. There might be some pennies that can be gotten out of equipment but anything worth anything has been sold or borrowed against already.

None of the employees are going to stick around without being paid so there are unlikely to be any familiar faces left to court old customers with.

There may or may not be some value in the name and the records but once everyone in the area knows the business is dead no one is going to be stupid enough to do business with them unless they are equally desperate.

If one is a really good vulture, there could be some money to be made, but it is mostly not about returning it to a profitable business. That ship has likely sailed and it is about getting whatever you can out of a carcass.

 

[ramsy]

I think you are in a fantasy.

During the great recession many NECA Electrical Contractors sold inventory to local suppliers & closed shop, since there was no market.

If not in a recession, OP can be stalking horse bidder in Section 363 sales, see BK filings as they occur, and make early buyout offers.

Unless sealed, all bankruptcy filings are a matter of public record; with local court clerks, or 24 hours a day via internet access to PACER.

 

[mtnelect]

I started my business in 1976, and still going strong. Please tell me when you started your business, and if you are still going strong ?
Or, are you still working for someone else ?

 

[petersonra]

During the great recession many NECA Electrical Contractors sold inventory to local suppliers & closed shop, since there was no market.

If not in a recession, OP can be stalking horse bidder in Section 363 sales, see BK filings as they occur, and make early buyout offers.

Unless sealed, all bankruptcy filings are a matter of public record; with local court clerks, or 24 hours a day via internet access to PACER.

How many bankrupt companies have you purchased and made profitable?