BBC Building Better Contractors

Services03 of 09

Across both paths · Financials

Build the company a buyer will pay more for.

One to two years gives you time to improve the drivers that shape business value — stronger margins, recurring revenue, capable management, reliable systems, and less dependence on the owner.

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Financial Preparation

A buyer needs to understand where the money comes from, where it goes, how consistently the company produces profit, and whether those results can continue without the owner. We help turn financial records into a clear picture of the business — with reliable reporting, documented adjustments, and visibility into the numbers that drive value.

Who this is for

  • You only understand the numbers at tax time. The real financial performance of the business isn’t clear until the accountant prepares the return.
  • Personal and business expenses are mixed together. The accounts don’t clearly separate the economics of the business from the owner’s personal spending.
  • Job costing isn’t reliable. Job-cost reports are incomplete, inconsistent, or don’t reconcile with the P&L.
  • You can’t quickly produce the financials others need. A buyer, lender, broker, or advisor asks for statements and supporting information that takes too long to assemble.

What we do

The work, in order.

  1. 01

    The accounting system

    QuickBooks, Sage, Xero or a contractor-specific ERP — the brand matters less than whether it is used correctly, consistently and in enough detail to explain the business. For a contractor that means revenue and costs separated into meaningful categories: service, maintenance, replacement, new construction, projects, divisions. Project-driven contractors also need reliable job-costing, work-in-progress, backlog, retainage and billing information.

  2. 02

    Do you actually close the books every month?

    It’s our basic financial-health test. If we ask, “What did you make last month?” — can you show us? A well-prepared company maintains monthly profit-and-loss statements and balance sheets, reconciled bank and credit-card accounts, receivable and payable aging, payroll records, loan balances and, where applicable, WIP and job-cost reports.

  3. 03

    A clean financial history

    The goal is a history a buyer, CPA, lender or valuation professional can follow and verify: three years of tax returns and year-end statements, monthly P&Ls, trailing-twelve-month results, general ledger and trial balances, reconciliations, aging reports, payroll including owner compensation, debt and equipment schedules, asset lists, WIP and backlog, revenue and gross profit by service line and major customer, recurring agreements, customer concentration, related-party transactions, and the documentation behind owner and one-time expenses.

  4. 04

    Normalized earnings

    The tax return shows one level of profit; it doesn’t necessarily show what the business economically produces for an owner or a buyer. Owner salary and benefits, discretionary expenses, family compensation, unusual professional fees and nonrecurring costs all need to be identified and documented — never simply added back because the seller wants a higher valuation. Unsupported adjustments damage the credibility of everything else.

  5. 05

    Quality of revenue

    How much is recurring. How concentrated the customer base is. Which divisions are most profitable. Whether margins are stable. How much work is already under contract. And whether revenue depends on the owner’s personal relationships. Two contractors producing the same $5 million are not the same $5 million businesses.

The questions

What we’re trying to determine

  • How accurate and current are the books?
  • How many years of reliable financial history exist?
  • Are the financial statements reconciled monthly?
  • Can revenue and profit be analyzed by division or service line?
  • Is job costing reliable?
  • Are owner expenses and legitimate add-backs documented?
  • Are receivables collectible and payables current?
  • Are debt and equipment obligations clearly documented?
  • Is recurring revenue identifiable?
  • Is customer concentration understood?
  • Can the company’s earnings be reproduced without the current owner?

The principle

Good financial records don’t create the profitability of your business. They prove it.

What you get

What you walk away with.

  • A financial-health assessment — covering your accounting system, reporting, and monthly close process
  • A buyer-ready financial package — organized so buyers, CPAs, lenders, and valuation professionals can follow and verify the numbers
  • A normalized-earnings schedule — with every adjustment clearly documented and supported
  • Profitability visibility by service line, division, and major customer — so you know what is actually driving performance
  • A prioritized list of financial weaknesses — with the issues that could affect value identified and addressed before a buyer finds them

Insights

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