{{first_name}} Every time we sit across from a construction company owner who's ready to sell their business, the same line is at the top of their list, "My business would be best for another contractor in my trade." A landscaper assumes the buyer is another landscaper. A roofer assumes it's another roofer.
My answer is always the same. Stay flexible. Stay open-minded. You want the best deal and the best successor for what you built and the only way to get both is to bring more than one buyer to the table. And we all know, if you have one buyer, you have no buyer.
A few years back, a plumbing contractor, I'll keep anonymous was certain he knew who'd buy his company. "It'll be the big competitor across town," he said. "They've wanted my crews for years."
He was half right. The competitor made a real offer. But the highest number came from a private equity group he'd never heard of. That surprised him.
Keep reading, by the end of this, it won't surprise you.
In almost all cases, three kinds of buyers tend to show up at your table. They want completely different things from you, and they don't pay the same.
The competitor. Someone in your exact trade. Here's what most owners get wrong, a competitor often doesn't want what you think they want. They won't carry two company names, so the brand you spent twenty years building, they may quietly retire it. They already have their own systems, so your SOPs don't move them. What they want is very narrow. They want your crews, your client list, your trucks, your territory. But they always have a cheaper option. Instead of buying you, they can just hire another salesperson and chase the same revenue. So a competitor either pays a premium because the fit is perfect, or they walk. But when they do buy, the transition is fast and you can be on your way to retirement sooner.
The adjacent trade. Someone who wants into your trade. This is the buyer most owners never see coming. A plumbing company eyeing your HVAC shop. An electrical contractor who wants to add mechanical. A general contractor pulling a specialty trade in-house. They're not in your trade, they want in, and you're the doorway. Building that capability from scratch would cost them years and a pile of mistakes. So unlike the competitor, this buyer does value your name, your team, your SOPs, your customer base, because they have none of it. And they see a second prize on top, cross-selling. Their customers become yours, and yours become theirs. That synergy is exactly why an adjacent buyer can pay up where a direct competitor won't.
The financial buyer. An investor. Private equity, a family office, a search fund. They need your name, because they don't have one in your trade. They need the brand that says, "two decades in business," your clients, your SOPs, your people, because they aren't bringing any of that. In their defence, they know how to raise the money; they just don't know how to run a furnace install. So they keep you, or your general manager, in the chair, and they'll often ask you to roll some equity and stay for the "second bite." This is the path if you want to cash out your chips but keep doing the parts you enjoy, without the weight of ownership.
Selling to someone in your own trade makes the most sense in one case, when the business is you, and it can't run without the knowledge in your head. Then a competitor who already has that knowledge is your safest landing.
Now here's what's specific to our world right now. Private equity has flooded the trades, and it's running the adjacent-trade play at industrial scale, bundling HVAC, plumbing, and electrical into one platform. Add-on deals in HVAC jumped 88% year over year through mid-2025, and PE went from 8% of HVAC deals in 2023 to 23% in 2024.
If you run a trade business doing a million or more in profit, you already know this, there's a private equity associate named Chad who emails you every quarter, and Chad is not going away.
Why does it matter for who pays more? Because that PE platform is really a financial buyer wearing the adjacent buyer's clothes. Same synergy logic, far deeper pockets. Here is how the math works, platforms get bought at 7–12x EBITDA, then buy companies like yours at 3–7x. That gap is the entire reason they're calling. You're not the investment. You're the arbitrage.
The number I want you to ask yourself this week:
10–20%. That's the premium a strategic buyer will typically pay over a pure financial offer, but only when the fit is real and they truly want what you've built. A direct competitor often won't pay it.
The adjacent-trade buyer and the PE platform usually will, because to them you're not a redundancy. You're a doorway and a head start. The label on the buyer's card tells you less than what they're missing that you happen to have.
There is no right buyer or wrong buyer. There is only a right exit or a wrong exit. The best thing you can do is build a business that makes all three compete for it, so you drive the deal instead of the buyer driving you.
If those three buyers looked at your business tomorrow, which one would pay the most, and why? If you can't answer that, that's the gap worth closing long before you ever return Chad's call.
Reply and tell me, have you gotten the call yet? I read every one.
Build deliberately.
Why am I writing this? I've spent over 20 years working alongside construction and trade business owners across Canada. My firm, N3 Business Advisors Inc., has helped hundreds of contractors buy, grow, value, and sell their businesses. I started my career as a teacher, and that part of me never left. So once a week, I put one lesson in your inbox, for free, to help you build a business that buyers line up for. If this was useful, pass it to one owner who needs it. If it wasn't, reply and tell me what you'd rather read about.
Nitin Khanna, CFA · Founder, N3 Business Advisors · Mastering the Business of Construction