Thinking About Selling? Get These 5 Business Functions Right First

You may not be thinking about selling your construction or engineering business today, but you should be building it like you are.

Why? Because when it’s time to exit, whether in 3, 5, or 10 years, buyers will only pay a premium for businesses that run smoothly without the owner. If everything’s in your head, or held together by your personal relationships, the value drops significantly.

This is where many construction, trade, and engineering SMEs fall short. They’re brilliant on the tools, projects, and delivery, but messy behind the scenes. If you want a higher valuation, smoother handover, and faster sale, there are five key business functions you need to get in order, before you even list the company.

Let’s break them down with practical advice, real examples, and plain-English strategies you can start implementing now.

1. Financial Systems & Reporting

Why It’s Important

Buyers don’t buy “potential” they buy performance and proof. If your numbers aren’t clear, accurate, and up to date, you risk losing deals or taking a lower offer.

Strong financial reporting shows:

• Consistent revenue and profit trends

• Clean balance sheet (minimal HMRC or supplier liabilities)

• Job-level profitability and WIP clarity

• Cash flow control and forecast accuracy

What You Need to Review

• Are monthly accounts produced within 10 working days?

• Do you produce rolling cashflow forecasts?

• Can you provide job-by-job P&L breakdowns?

• Are debtors and aged WIP under control?

Download our free 13-Week Cashflow Template: https://www.jonesfa.co.uk/resources

Strategy

• Introduce monthly management accounts (with commentary)

• Forecast cashflow weekly for 13 weeks

• Build board-level reporting packs

• Clean up reconciliations 12+ months before sale

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Real Example

A building contractor turning over £6m struggled to evidence job profitability, buyers reduced their offer by £400k. After implementing reporting dashboards and WIP control 18 months ahead of exit, offer value increased by 15%.

Misconception

“Buyers will understand our margin when they meet us.”No, they only believe what they can see in black and white.

2. Processes & Systems (Especially Job Costing)

Why It’s Important

Construction businesses rely on tight controls, materials, labour, variations, retentions. If your processes aren’t documented and scalable, your business isn’t seen as transferable.

Buyers want reliable, repeatable operations.

What You Need to Review

• Is there a live job costing system (Joblogic, SimPRO, etc.)?

• Are purchase orders and GRNs linked to projects?

• Is WIP updated monthly and reviewed by a QS/FD?

• Are workflows documented, not just verbal?

  
  

Relevant blog: How Cost-to-Complete and Cashflow Forecasts Illuminate Your True Position

Strategy

• Map out key workflows (tender > PO > delivery > invoicing > retention)

• Standardise approvals and document storage

• Invest in integrated systems 2–3 years before exit

  
  

Real Example

One East Midlands engineering firm reduced acquisition negotiation time from 9 months to 4 months simply because the buyer didn’t have to untangle manual paperwork and inconsistent cost tracking.

3. Leadership & Team Structure

Why It’s Important

The #1 deal-breaker in SME acquisitions? Over reliance on the owner. If your site team, QS, or ops manager can’t make decisions without you, value drops.

A buyer wants to inherit a business, not a job.

What You Need to Review

• Can the business run without you for 6+ weeks?

• Do you have a second-in-command (Ops/Commercial/FD)?

• Are KPIs and responsibilities documented by role?

• Have you built a leadership culture, not “ask the boss” culture?

Strategy

• Delegate 80% of your day-to-day tasks within 24 months of sale

• Train a senior team and give them responsibility and visibility

• Tie in key people with retention bonuses or earnouts

  
  

Real Example

A lift services firm saw their multiple improve from 3x EBITDA to 4.2x after introducing a clear leadership structure with delegated authority and succession plans.

4. Customer Contracts & Recurring Revenue

Why It’s Important

Buyers love stable, predictable income streams. If 80% of your revenue must be rebid annually, risk increases. Recurring contracts, frameworks, and proven repeat clients boost value and reduce due diligence pain.

What You Need to Review

• What % of revenue is under contract or service agreement?

• Are contract terms transferrable?

• Do you rely on one or two large customers (over 20%+ each)?

  
  

Strategy

• Build service/maintenance contracts or retainers

• Negotiate longer agreements when renewing

• Spread risk across multiple customers

  
  

Misconception

“We’ve always worked with them, they wouldn't go anywhere.”Buyers won’t believe that without signed agreements in place.

5. Tax & Exit Strategy (Early!)

Why It’s Important

Tax planning isn’t something you start when the deal is done. It's a 2–3 year strategy to maximise reliefs.

Without planning, you could miss out on:

• Business Asset Disposal Relief

• Entrepreneurs’ relief

• Group restructuring tax savings

• Asset extraction before sale

  
  

Relevant read: How to Prepare Your Business for a Funding Round

Strategy

• Start exit tax planning 2–4 years in advance

• Review shareholding structure and asset ownership

• Engage an FD to build a full exit model

  
  

Download our free Exit Readiness Checklist: https://www.jonesfa.co.uk/resources

Key Takeaways

• Buyers pay for systems, not chaos

• Succession starts 2–4 years before your exit

• Build leadership, controls, and contract value

• Strategic finance = higher multiples & less stress

  
  

If succession or exit is on your radar, even if it's “one day,” now is the time to act. JFA helps construction and engineering SMEs build finance functions, reporting systems, and exit plans that add 20–40% to business value.

Let’s discuss how to prepare your business the right way.

Wrapping up today's insights, tomorrow we simplify another accounting challenge.