A friend or relative probably offered to sell you their asphalt maintenance business. You're excited to pull the trigger and buy the business straight away, but something's holding you back. Maybe you don't know a single thing about crack repair or you've never mixed asphalt sealer your entire life. Or maybe you're unsure that you can make it work.
Here at Asphalt Kingdom, we're dedicated to helping asphalt maintenance business owners find the right resources that will help them run their companies better and make them more profitable. So if you're a prospective buyer of an existing sealcoating and crack repair business, then read on because this blog is for you.
Read everything you can about asphalt maintenance
In business as is in life, the worst thing you can do for yourself is not knowing what you're getting yourself into. If you're planning to purchase an existing sealcoating business, then the first thing you should do is devour every resource you can find on sealcoating, crack repair, and even line striping.
There are a few books addressing the topic of asphalt pavement maintenance out there and you can buy them to get started.
The internet is also a veritable goldmine for asphalt maintenance resources. Asphalt Kingdom, in particular, has tons of resources for you if you're just starting out or buying an existing business.
We've covered almost every asphalt-related topic you can think of, starting from technical ones such as how to do pavement assessment, how to mix sealer in 55-gallon drums, and more. We've also covered sealcoating profits for newbies, as well as the ins and outs of hiring and retaining talent.
But if you want an in-depth look at running a sealcoating business, then check out our Asphalt Contractors Course. This course has everything you need to make sure that the business you're going to buy remains profitable as it changes hands.
And the best thing about it? All the Asphalt Kingdom resources mentioned above are free.
Related: Getting Your Asphalt Sealcoating Machine Ready
Find out why the business is up for sale
One of the first things you need to look into when buying an existing business is why the business is up for sale. Some business owners who are trying to sell their companies probably want to retire or are in ill health and unable to manage the company's day-to-day operations. Some, perhaps, are exploring new opportunities or more exciting lines of business, and that's alright.
But let's face it, not all asphalt maintenance businesses are in the black. So we recommend that you think twice about taking over a company that has been in the red for some time and has proven to be unsalvageable.
What should you do if you get yourself in a sticky situation like this? If you're not a financial maverick and you're not up to the challenge of saving a struggling business, the best thing to do is to cut your losses and politely say no to the offer.
Hire an acquisition team and conduct due diligence
When it comes to buying an asphalt maintenance business (or just about any existing business), the best thing you can do is to ask the experts for help.
You need to collect and analyze company data and financial information (balance sheets, tax returns, etc.), so it's best to hire an accountant and a lawyer to help you with these tasks. A lawyer can also help you negotiate favorable terms and conditions, as well as help you close transactions.
You should also hire a business broker or an independent business valuations firm to help you determine the value of the asphalt maintenance business you're planning to buy. Business brokers are also fantastic to have around when it comes to dealing with that mountain of paperwork that comes with buying a business.
While conducting due diligence, make sure that the business licenses and permits are up to date, and all the paperwork is in order. Double-check environment regulations, and have your lawyer inspect the contract thoroughly.
Related: The Dangers of Over and Under-Insurance for Asphalt Maintenance Companies
Check the status of the asphalt maintenance equipment
Assets, such as asphalt maintenance equipment, are usually included in the contract when a business is put up for sale. Before signing that contract, check whether the existing equipment is in great shape, in need of repairs, or should be replaced entirely.
Repairing broken or replacing outdated sealcoating or crack repair equipment are additional expenses and they can put a sizable dent in your wallet. You might not be ready for additional expenses, but you have to include them if you want to hit the ground running when you take over.
Looking for additional asphalt maintenance resources or want to add a new crack filling machine to your arsenal? We're more than happy to answer your questions! Just send us a message or give us a call at 1-866-399-5562 for product questions and feedback