Construction Business Valuation
Construction Business Valuation Calculator & Exit Planning Built for Contractors
We built one platform that tracks your construction business's value monthly, identifies exit gaps early, and ensures your personal finances align with your exit timeline.
1,000+ Businesses have joined YourExitValue.com
Most Construction Owners Have No Idea What Their Business is Actually Worth
Current Construction Valuation Multiples (2026)
Construction values are strong due to increased buyer demand from larger contractors, PE, strategic acquirers. Here's what companies sell for:
Every business is different. That's why you need to track your value.
Included in Your Exit Value is a complete Exit Planning Assessment where you track your progress quarterly against your results from the previous quarter.
Know your number and watch it grow
Most business owners guess at their value. You'll know it with precision.
Our platform uses six proven valuation methodologies to give you a complete picture of what your business is worth today—and tracks how that number changes month over month. No more waiting for annual appraisals or paying $15K+ for outdated reports.
See your trends. Spot opportunities. Make informed decisions
What Actually Drives Construction Business Value
Revenue and earnings are the two most influential factors in your construction business's valuation. But not all companies are valued equally. Here are the factors that move your number up—or down:
Contract Backlog
12+ Months
Backlog of signed contracts shows revenue visibility. Strong backlog provides predictable revenue—companies with 6-12 months of backlog have demonstrated demand and pricing power.
No backlog = uncertain revenue
Bonding Capacity
Strong Bonding
Diversified project types and customers reduce cyclical risk. Residential-only contractors face boom-bust cycles—diversification across residential, commercial, and project types creates stability.
No bonding = limited opportunities
Gross Margin
20%+ Gross
Gross margin by project type shows where you make money. Job costing by project reveals true profitability—some contractors lose money on certain work without knowing it.
Low margins = estimating problems
Project Diversity
Multiple Types
Bonding capacity enables larger projects. Bonding capacity demonstrates financial strength and opens larger project opportunities—limited bonding limits growth.
Single type = cyclical risk
Workforce
Skilled + Stable
Estimating and project management systems show professional operations. Proper bidding, change order tracking, and project management demonstrate scalable operations beyond tribal knowledge.
High turnover = quality risk
Equipment Ownership
Owned Assets
Owner role on job sites vs. in office impacts scalability. Owners swinging hammers create dependency—superintendents and PMs handling field work shows transferable operations.
Rental-only = margin leakage
How to Value a Construction Business
The U.S. construction industry includes over 750,000 companies generating approximately $2 trillion in annual revenue. Construction businesses span general contractors, specialty subcontractors, and design-build firms, with valuations reflecting backlog strength and operational capabilities.
Seller's Discretionary Earnings (SDE) is used for smaller contractors, while EBITDA is standard for larger firms. Construction businesses typically sell for 1.5x to 3.5x SDE, or 3.0x to 5.0x EBITDA. Companies with strong backlogs, bonding capacity, and diversified project pipelines command the higher end.
Revenue multiples for construction businesses generally range from 0.15x to 0.35x annual revenue — lower than many industries because construction is project-based with variable margins and inherent risk in each contract.
The unique valuation factors in construction are the backlog, bonding capacity, and license/prequalification status. A strong backlog of signed contracts provides revenue visibility that reduces buyer risk. Bonding capacity — the ability to secure performance and payment bonds for larger projects — is effectively a license to compete for major work and is extremely difficult to establish from scratch. State contractor licenses, government prequalifications, and union relationships (where applicable) are transferable assets that add significant value.
Construction company valuations have benefited from infrastructure spending, commercial development, and the skilled trades labor shortage that creates barriers to new entrants. Use our free calculator above to get your instant estimate, then track your value monthly with YourExitValue.
Frequently Asked Questions
What multiple do construction businesses sell for?
Most construction businesses sell for 1.5x – 2.5x SDE or 0.2x – 0.4x annual revenue. However, the range is wide. Companies with strong contract backlog can command significantly higher multiples. YourExitValue tracks exactly where you fall on each value driver.
How does contract backlog affect my company's value?
Contract Backlog is one of the biggest value drivers for construction businesses. Larger contractors, pe, strategic acquirers specifically look for companies with strong performance here. Improving this metric can significantly increase your multiple.
How long before selling should I start tracking my construction business value?
Ideally 1 to 5 years before your target exit. This gives you time to improve your contract backlog, reduce owner dependence, strengthen your team, and document growth trends buyers pay premium prices for.
Who buys construction businesses?
Common buyers include larger contractors, PE, strategic acquirers, as well as individual buyers looking to own a business and strategic acquirers. Each buyer type values different aspects. YourExitValue helps you understand what each looks for.
What valuation method is used for construction businesses?
Most construction businesses are valued using SDE (Seller's Discretionary Earnings) multiples for smaller companies under $1M in earnings, and EBITDA multiples for larger companies. Revenue multiples (0.2x – 0.4x) are sometimes used as quick reference.
What's the fastest way to increase my construction business value?
The fastest improvements typically come from: 1) Improving your contract backlog to hit the target, 2) Reducing owner dependence, 3) Documenting your systems and processes, and 4) Cleaning up financials. Most owners add 20-40% in 12-24 months.