Selling a construction business in California can be incredibly profitable—if done right. With the state’s high demand for contractors and infrastructure work, it’s a prime market. But buyers are selective, and they expect a business that’s not just operational, but also well-documented, compliant, and scalable.
1. Get Your Compliance and Licensing in Order
Before listing your business, make sure your CSLB license is current and matches the type of work you do (e.g., B - General Building, C-10 - Electrical). Buyers will also want:
- Up-to-date OSHA safety records
- Worker’s comp insurance proof
- Bonding and liability insurance certificates
- Active permits on current projects
Non-compliance kills deals. Clean up your legal and safety records early.
2. Show What Your Business Is Worth—Not Just What You Earn
Buyers don’t just buy revenue—they buy assets, contracts, and reliability. Make a clear list of:
- Fleet vehicles, trailers, and machinery with fair market value
- Signed contracts and active job pipeline
- Recurring clients or property management contracts
- Union vs. non-union structure (if applicable)
Include depreciation schedules, photos, and serial numbers for equipment where possible.
3. Financial Documentation Is Crucial
To attract qualified buyers and SBA lenders, your financials should be organized:
- Three years of tax returns
- Year-to-date profit & loss statement
- Job costing breakdown by project
- Owner salary, perks, and addbacks for adjusted profit (SDE)
Pro tip: Use our Exit Clue Valuation Tool to estimate your business value based on real market comps.
4. Highlight Your Reputation & Brand
Buyers want peace of mind. Show them:
- Yelp, Google, Houzz, and BBB reviews
- Before-and-after project photos
- Repeat customer stats or referral sources
- Instagram or Facebook project showcases
A documented reputation builds buyer trust—and valuation power.
5. Who Runs the Business—And Can They Be Replaced?
Are you the face of the company, or do operations run without you? Buyers favor businesses with:
- Foremen or project managers already in place
- Standard operating procedures (SOPs)
- Vendor relationships and employee retention history
6. Price It Right (and Justify It)
In 2025, most construction companies sell for 2.5x–3.5x SDE. Highly organized, low-risk companies with government or commercial contracts can command even higher multiples.
Use this formula:
SDE x Industry Multiple = Approximate ValuationThen justify the price with documentation.
7. Work With a Broker Who Understands Construction
Not all brokers are equal. A construction-savvy broker can:
- Prequalify SBA buyers
- Confidentially market to serious operators
- Prepare listing packages with job and equipment breakdowns
At Exit Clue, we specialize in construction exits. Learn how we work.
Final Thoughts
Selling your California construction company is a major opportunity. With the right prep, documents, and positioning, you can exit with confidence—and top dollar.
Need help getting started? Contact us here, or reach out directly to Alexey on LinkedIn.