Construction businesses are valued through two documents most owners never show anyone: the work-in-progress schedule and the bonding file. Revenue is the headline; backlog quality, bonding transferability, and who actually owns the client relationships decide the price.
Wide-banded starting ranges from the same table our free valuation calculator uses — a broker review narrows them after seeing real financials:
| Segment | Typical range | What moves it |
|---|---|---|
| General construction | 1.5× – 3× SDE | Bonding capacity transferability + WIP backlog quality drive band. |
A big backlog of thin-margin bid work is a liability wearing a press release. Buyers underwrite signed contracts, realistic completion estimates, and margins that survived past jobs — the WIP schedule is read before the income statement.
Bonding capacity that rests on the owner's personal financials evaporates at closing. Moving the surety relationship onto the company's own balance sheet — earlier than feels necessary — is core sale preparation.
If the owner is the chief estimator and the client relationship, the buyer is purchasing a job. A bench of estimators and project managers who stay is what converts a contracting practice into a sellable company.
Over- and under-billing analysis on every open job, against signed contract values and third-party-verifiable completion. This is where construction deals are won, lost, and re-traded.
Confirm the surety will write for the business post-close and whose license the operation runs under. Both are closing conditions with lead times.
Retainage schedules and slow-pay GCs can hide a working-capital hole that the purchase price doesn't mention. Age the receivables and read the pay-when-paid clauses.
General-construction businesses commonly trade around 1.5–3× SDE, with bonding-capacity transferability and WIP/backlog quality driving the band. Service-heavy contractors trade toward specialty-trade ranges. The free valuation calculator gives a personalized starting range.
Yes, but the surety relationship has to be transitioned deliberately — buyers and their lenders will require evidence that bonding capacity survives the ownership change. Starting that conversation with the surety before going to market prevents the most common construction-deal stall.
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