Selling an owner-operated business in the Washington, DC region.

The DC-area business mix

Owner-operated companies in the region fall into a few clear groups:

• Government contractors: IT services, consulting, engineering, training and professional services firms in Northern Virginia and suburban Maryland, many of them small businesses that won work under set-aside programs.
• Professional services for the region's institutions: legal support, association and nonprofit services, accounting, staffing and communications.
• Home and building services across Fairfax, Loudoun, Montgomery and Prince George's counties: HVAC, plumbing, remodeling, landscaping and property maintenance.
• Healthcare practices and home care across the suburbs.
• Hospitality in the District itself: restaurants, catering and event businesses that rely on the conference, association and government calendar.

Who buys DC-area businesses

Strategic acquirers

In government contracting, many of the buyers are other contractors. They buy for contract vehicles, past performance, agency relationships and staff who hold security clearances. They often understand your contracts in detail, which helps on price and raises the stakes on confidentiality.

Private-equity add-ons

Private-equity-backed government services platforms buy smaller firms to add capabilities and customers. Home services and healthcare platforms are buying in the suburbs as well.

Search funds and ETA buyers

Searchers in the region, including former officers and former federal employees, look for stable services businesses with recurring customers and a team that stays.

Individual operators using SBA 7(a) financing

Operators across Northern Virginia and Maryland buy home services, healthcare and B2B businesses with SBA 7(a) loans, which go up to USD 5 million. The bank underwrites the cash flow the business can document, not the pipeline.

What DC-area sellers typically get wrong

• Selling the company without mapping the contracts. Buyers will ask, for each contract, when it ends, when it is recompeted, whether it was won as a set-aside, and how it moves to a new owner. How a federal contract transfers, and whether the agency has to agree, is a question for government contracts counsel at the start, not at closing.
• Not knowing which buyers value the pipeline. Whether set-aside work and small-business status survive a sale to a larger buyer affects who will pay most for your backlog. Get counsel's view before you decide who to approach.
• Losing cleared staff and program managers. Key people are often what the buyer is paying for. Retention arrangements should be in place before the sale is discussed internally.
• Treating three jurisdictions as one. DC, Virginia and Maryland differ on employment, registration and real estate rules. Where the sale involves real property or a lease, that part is handled by a real estate professional who holds the right license in that jurisdiction, working alongside us.
• Borrowing valuation talk from large deals. Big contractor acquisitions are often discussed as revenue multiples. Owner-operated firms are valued on earnings, and a buyer's lender will check them.

How we value a DC-area business

For a contractor, earnings are only as good as the contracts behind them, so we read the backlog before we read the multiple. We build seller's discretionary earnings from tax returns, bank statements and payroll, adjust for contracts ending or up for recompete, and apply a multiple that reflects size, customer mix and owner dependence. The debt-service test asks whether a buyer financing the deal could pay the loan from cash flow that is actually under contract or recurring. The asset floor covers receivables, equipment and working capital. The answer is a range, with the contract risks written next to it.

How the process runs

1. Conversation. Confidential, no cost, no obligation.
2. Valuation and contract review. A written range, plus a list of contract, staffing and ownership questions to take to counsel early.
3. Buyer search and qualification. An anonymized profile reaches only buyers who have signed an NDA and shown they can fund the deal.
4. Negotiation and closing. Letter of intent, diligence and closing, managed alongside your attorney and CPA.

Every engagement is agreed in writing and signed before any work begins. The first conversation is confidential and carries no cost or obligation. See the United States overview for how engagements run across our US markets, or our page on New York City.