If you’re thinking about acquiring a business, you should strongly consider buying a granite countertop business that has a strong online presence.

Like many home services businesses, installing and manufacturing granite is generally considered a recession-resilient business. A strong advantage in turbulent financial times.

Buying an existing business is often less risky than starting one yourself. You don’t need to find a location, hire, and train staff, find new customers, etc.

There are several advantages to buying an online granite business. You’ll get the whole operation – including trained staff and tools and vehicles.

It’s a great business with a large addressable market, high net margins and revenue per employee. 

There are some risks, however.

Sometimes the whole business is centered around the owner-operator and there is a void when they leave. You can also have high staff turnover. 

Another risk is that you simply get the price wrong and run out of cash. 

You can mitigate these risks by working diligently in the transition phase. 

Let’s look at the opportunities and risks of buying an established granite business. 

The opportunities of buying an established granite business

1. You’re getting the whole operation.

It isn’t easy to start a granite business from scratch so buying an established business means you’re getting all the things you need right up front. 

This can include the skilled tradespeople who will do the actual installation along with the necessary vehicles and tools. 

If you’re also getting into manufacturing, you’ll be getting the machinery and equipment you need to manufacture the granite tops themselves. 

This can include very large and expensive equipment that needs a relatively large location to house it all. 

You should also be getting the existing business’s suppliers and other industry contacts. 

2. Possible to Scale Up and Grow into Other Markets

Once you have the manufacturing process and skilled tradespeople, it’s possible to move into new geographic areas. 

You don’t need to set up a whole new operation but can instead set up a sales office in a nearby city, for example. You can still manufacture the tabletops at your first location. 

This makes it easier to expand without having to set up all the equipment. It’s a great growth opportunity for an existing granite business. 

One advantage of buying an existing granite business is that they often have a large addressable market. 

3. Attractive margins and revenue per employee, job

Granite businesses that manufacture and install countertops have a net margin of around 20-30 percent, which makes them acquiring a business

Breaking revenue down into different segments is a great way to assess profitability. Granite countertop businesses often have high revenue per employee, per job and per customer. 

The risks of buying an established granite business

1. Owner-operator IS the Whole Business

One of the risks of buying an established granite business is that there will be a void when you take over the company. 

Many small businesses – including in the home services industry – are centered around a single owner-operator. They are the lynchpin of the whole operation. 

They must wear many hats and they are probably in charge of virtually all aspects of the business – from sales to customer relationships to supplier contacts. 

It’s possible they are the most experienced granite installers as well. 

The risk is that if they leave, the whole business will collapse in their absence. 

You can mitigate this risk by making sure the owner sticks around for a while after the sale, either as an employee or a consultant. You can also make sure to establish relationships with key employees and suppliers during the transition. 

2. Employees will Flee After the Change in Ownership

Another key risk in buying an established granite business is that employees will leave after you take over. 

This can be especially problematic for your operation if they are the ones with granite-specific skills, whether that is in manufacturing or installation. 

You should take time to speak with all the key employees during the transition to discuss their ongoing role in the business and what your values and plans are for the future. Ask about the company culture and see how you can maintain or align it with your own vision.

Don’t try to implement too many changes too quickly either. This can be very unsettling for existing employees. You can put your own stamp on the business but make sure you’re doing it at a pace that maintains morale and limits turnover.

3. Running out of cash

Another risk is that you run out of cash shortly after buying the business. Perhaps you paid too much, or you failed to predict exactly how much money you’d be making. 

Your forecast was off and it’s not as profitable as you’d expected. 

This risk can be mitigated by making sure you’re paying a fair price and by conducting an extensive and thorough due diligence. 

Consider hiring a professional to help. This might cost a little bit of money in the short term but can help avoid running out of cash once you take over. 

Conclusion

Buying an established granite business comes with several opportunities as well as possible risks. 

You should spend a long time searching for the right business and conduct a thorough due diligence to make the transition to new ownership as smooth as possible. 

Consider hiring a professional to guide you through this process, ensuring you pay a fair price and any potential liabilities are uncovered before you close the deal.