Owners tend to assume a buyer looks at revenue and profit and makes an offer. The groups that are consolidating the door industry look at something more specific, and they look at it before they ever get to the number. Chris Jones, who leads our overhead door and loading dock practice, spent his career inside the industry and got to know many of these groups along the way. Here is what he sees them underwriting when they pull up a dealer, and what each item means for you.
1. The mix
Residential is roughly twice the size of commercial in this industry by revenue, Chris notes, and most dealers started residential and grew into commercial. A buyer wants the split: residential replacement, residential new construction, commercial sectional, rolling steel, high-speed, dock equipment. Each segment carries a different margin, a different sales cycle and a different exposure to housing starts and construction activity. Replacement and service revenue is underwritten as the dependable layer. New-construction install revenue is underwritten as the layer that disappears when the builders slow down. A dealer who can show the mix by segment, by year, is a dealer the buyer can price with confidence. One who cannot gets priced with a discount for the uncertainty.
2. The service book
Service and repair is the part of a door business that renews itself. Buyers want to know how many customers are on planned maintenance, how much repair revenue arrives without a sales call, and what the commercial service accounts look like by tenure. A dealer with a deep service book and a modest install business is often worth more to a platform than a larger dealer whose revenue is mostly installs. If you have never pulled service revenue out of the total, that is the first report to build.
3. Technicians and trucks
In this trade the workforce and the fleet are the business. Expect questions on the number of service techs and installers, how long the senior ones have been there, what each truck produces in a day and how much of the schedule is drive time. Buyers also ask what happens to the business if two of the senior techs leave with the sale. A dealer whose crew has been together for years, with routes dense enough to keep the trucks productive, has a shorter conversation and a better one.
4. The manufacturer lines, and whether they transfer
Which door lines you carry, on what terms, and whether the dealer agreement can be assigned in a sale. Buyers look at revenue by manufacturer and at any exclusivity or territory protection. A strong relationship with a manufacturer is an asset until it turns out to be a relationship with the owner personally, written into an agreement that does not survive a change of ownership. That comes up early in diligence and it is worth knowing the answer before a buyer asks.
5. How much of the business lives in your head
The groups buying dealers have seen a hundred founder-built companies and they expect to find one. What they underwrite is the management layer that exists today: a general manager, a service manager, a lead estimator, someone who could run the business for ninety days without you. The dealers that get the best outcomes are the ones that have moved from a founder's memory to a system, where the goals for the year are written down, assigned to people and reviewed. Chris teaches a straightforward method for doing that, borrowed from how the best industrial companies run, and it takes a year or so to put in place. A buyer who sees it in place prices the business as a company. One who does not prices it as a job.
The takeaway
Each of the five is something you can measure now and improve over a year or two. Buyers price what they can see. A dealer who knows his mix, his service book, his crew, his manufacturer terms and his second layer walks into the conversation knowing more than the person across the table.
