$2.3M TO $5.5M
VALUATION IN
9 MONTHS.
The owner of a $13.5M commercial marine general contracting company was not in trouble. Crews were experienced. GC relationships were strong. Work kept coming. He wanted to sell. When he looked at what the business was truly worth, the number was not there. Four accounting staff. No job costing. No per-project reporting. A buyer does not pay for revenue. They pay for provable, sustainable profit. We built the job costing structure. We tightened spending that had never been scrutinized. Subscriptions, vendor relationships, material purchasing. We put a clean twice-monthly reporting system in place. Net profit went from 7 percent to 14 percent on the same revenue, recovering $917K a year that was already inside the business. At 7 percent net with disorganized books: $2.3M valuation at a 2.5x multiple. At 14 percent net with 9 months of clean documented profitability: $5.5M valuation at a 3x multiple. Same revenue. Same crews. Same work. $3.2M more in business value.
The business was not broken. The reporting was. Buyers pay for what they can verify. A $13.5M business with no per-project visibility looks risky regardless of how good the actual work is. CONTROL closes that distance.
This is not a turnaround story. The owner was not in financial distress. He had experienced crews. Strong GC relationships. Consistent work flow. Good positioning in his market. The business was running. He was paying himself. The bank account was healthy enough.
What he did not have was visibility. Four accounting staff handled the day-to-day. Books got closed monthly. Nobody could tell him which projects were the profitable ones, which clients were the high-margin ones, or which work types he should pursue more of. The reporting was good enough to file taxes. Not good enough to make decisions.
When he started exploring a sale, the shortfall became expensive. Buyers were looking at his revenue ($13.5M, growing) and his EBITDA (7 percent, which is below median for commercial marine) and pricing accordingly. At a 2.5x multiple, his business was worth around $2.3M. He thought it should be worth more. The buyers said: prove it.
No Project-Level Visibility
Costs were tracked at the company level. Not the project level. Healthy projects were subsidizing losing projects. There was no way to see which work types or which clients were truly profitable.
Spending That Had Never Been Scrutinized
Subscriptions, vendor relationships, material purchasing habits. None of it had been reviewed in years. The business had grown and the costs had grown with it. Some categories were 40+ percent over market.
Pricing Built on Assumptions
Bids were priced on historical norms. Not on real cost data. Without project-level reporting, nobody could verify whether the pricing was truly working. Some work types were profitable. Some were silently losing money.
Disorganized Documentation Means M&A Discount
For a buyer, undocumented profit is not profit. The 7 percent net margin was real. Without per-project data, buyers could not verify how sustainable it was. The valuation discount was the cost of that uncertainty.
- Project-level job costing: 7-category structure with cost codes that mirror the SOV. Finally visible which projects, clients, and work types were truly profitable. CONTROL Chapter 1.
- Spending review: systematic audit of every vendor relationship, subscription, and recurring cost. Eliminated or renegotiated everything that was not pulling its weight.
- Pricing alignment: estimates rebuilt around real cost data instead of historical norms. The work types that were not profitable got repriced or walked away from. CONTROL Chapter 4.
- Twice-monthly reporting cadence: clean reports every 15 days showing GP, NP, AR, WIP. The documentation a buyer wants to see. CONTROL Chapter 7.
- Monthly CEO meeting: 13 months of trending data on every key metric. Proof of the new trend, not just a snapshot.
Months 1 to 3. Job costing installed. First reports revealed which projects had been losing money all along. Spending review identified $400K+ in annual cost reductions. Pricing on certain work types was adjusted upward.
Months 3 to 6. Net profit on completed projects started coming in at 11 to 13 percent. Versus the 7 percent the business had been averaging. The trend was consistent enough to be real. Not a fluke.
Months 6 to 9. 9 months of clean per-project documentation. Net profit holding at 14 percent. Annual recovered margin of $917K. Money that had always been inside the business. It could not be captured without the visibility to see where it was leaking.
The sale conversation. Same business. Same revenue. Same crews. The conversation with buyers changed. At 14 percent documented EBITDA with 9 months of clean per-project data, the multiple moved from 2.5x to 3x. Valuation went from $2.3M to $5.5M. The owner now had real optionality. Sell at a real number. Or keep running the business with the same systems that would compound those numbers further.
WANT IT INSTALLED FOR YOU?
CONTROL teaches you how to build the system yourself. The Construction CFO, a service of Sulphur Prairie Management, builds and runs it for you. Same system. Same outcomes. From $1,900 per month. 60-day onboarding.
Buyers pay for provable, sustainable profit. Not revenue. A $13.5M marine GC at 7 percent net profit with disorganized books and no per-project reporting was worth about 2.5x. The same business at 14 percent net with clean documentation was worth 3x. Same revenue. The multiple changed because the proof changed.
Three places. Spending that had never been scrutinized (subscriptions, vendor relationships, material purchasing). Pricing discipline once job costing showed which work was truly profitable, and elimination of margin leaks that nobody could see before because there was no per-project reporting. The revenue stayed the same. The cost structure tightened.
Per-project job costing. Monthly P&L by project type. 13-week rolling cash forecast. WIP reporting on every active project, and 12 to 24 months of CEO reports showing the trends. Most marine contractors do not have any of this. Building it is the highest-leverage thing an owner can do to maximize sale value.
Minimum 12 months. Ideally 24. Buyers want to see trending data. Not a snapshot. If you are 12 months from a sale conversation and you do not have job costing installed yet, today is the day. Sulphur Prairie Management does this as a done-for-you service for marine contractors planning a sale or recapitalization.
2.5x to 3.5x EBITDA depending on documentation quality, customer concentration, and management depth. A well-documented, professionally-run business with diversified customers and a strong second-tier management team will hit the top of that range. A disorganized business with key-person dependency and concentrated customers will hit the bottom.
