Selling a Construction Company in French-speaking Switzerland: What Makes a Successful Business Transfer

The building and construction sector holds a special place in the economy of French-speaking Switzerland. Its companies — whether a family-run masonry firm in the canton of Vaud, a civil engineering company in Fribourg or an SME specialising in HVAC installations in Geneva — have characteristics that make their transfer particularly complex. If you are considering selling your construction company, it is essential to understand these specifics before starting any process. This article gives you the keys to approaching this step with clear eyes.

1. Why construction has its own business transfer rules

Construction is not a sector like any other. Its pronounced cyclicality exposes companies to significant swings in revenue depending on the property market, interest rates and public investment policies. A potential acquirer will carefully analyse how well your company has withstood past cycles.

Capital intensity is also high: site machinery, commercial vehicles, tooling, stocks of materials — fixed assets can represent a significant share of the company's value. Finally, unlike many service activities, the value of a construction SME is closely tied to its order book, which reflects short- and medium-term visibility on future revenue.

These three dimensions — cyclicality, fixed assets and sales pipeline — mean that valuing and transferring a construction company requires a tailored approach, distinct from the one applied to a services company or a trading business.

2. The order book and pipeline visibility

In a construction SME, the order book is one of the first things a buyer examines. It gives a concrete picture of visibility over the coming months and of the company's ability to maintain its activity independently of the departing owner-manager.

Several elements make up this analysis:

• Sites in progress: stage of completion, forecast margins, risk of overruns.
• Framework agreements and partnership agreements: whether they are transferable is decisive.
• Tenders won but not yet started: they represent a promise of revenue, provided they are documented.
• Seasonality: a transfer completed in late autumn, at the start of the slow period, does not have the same profile as an acquisition during the high season.
• Margins per site: real project-by-project profitability is often more telling than overall revenue.

A solid, well-documented order book reassures the buyer and contributes directly to a coherent valuation of the company. To find out more about what an acquirer is actually looking for, read our article What does a buyer really look for in an SME in French-speaking Switzerland.

3. Dependence on the owner-manager and their network

In many construction SMEs, it is the owner who carries the relationships: with property management firms, architects, engineering offices, municipalities and public or private principals. This concentration of relationships is one of the risks most frequently identified during due diligence.

The central question is simple: if you leave tomorrow, how many clients or partners leave with you? A buyer will seek to understand:

• To what extent relationships are institutionalised (contracts, documented history) rather than purely personal.
• Whether other members of the team maintain lasting ties with key partners.
• How long the seller intends to stay on to support the business after the transfer.

The more your network is transferable and anchored in the organisation rather than in you personally, the smoother the transfer will be and the more defensible the company's valuation.

4. Skilled labour and team retention

The shortage of skilled staff in Swiss construction is structural. Masons, tilers, electricians, HVAC technicians, experienced team leaders — these profiles are rare and retaining them is a strategic issue for any buyer.

During a business transfer, the risk that key staff leave the company is real, particularly if the announcement is poorly handled or the period of uncertainty drags on. To limit this risk:

• Identify your indispensable foremen and team leaders and assess their length of service, their loyalty and their current terms.
• Document the specific know-how that resides in the teams rather than in individuals.
• Make sure that working conditions comply with the collective labour agreements (CLAs) applicable in your trade — a point that every serious buyer will check.

A stable, competent team is one of the most valuable assets of a construction SME. It is as reassuring as a healthy order book.

5. Equipment fleet, vehicles and operating premises

The physical assets of a construction company can represent a considerable share of its value. An accurate inventory and their actual condition are essential elements of any transaction.

What a buyer will analyse

• Ownership vs leasing or hire: the financial commitments under leasing contracts are taken over with the company and must be clearly identified.
• Condition and age of the equipment fleet: ageing machinery requiring replacement in the near future affects perceived value.
• Depot, warehouse or workshop: are they owned by the company, rented from a third party or from you personally? Is the lease transferable and on what terms?

A clear property situation — with documented leases or unencumbered ownership — considerably simplifies the legal structuring of the sale.

6. Warranties and risks specific to construction

Construction is one of the sectors where post-transfer risks are the most significant, particularly because of the statutory and contractual warranties applicable to completed works.

Under Swiss law, Article 371 CO provides for a five-year warranty period for defects in a building work. The SIA 118 standard, frequently incorporated into works contracts, imposes its own specific time limits and procedures. Defective work on sites completed before the sale can therefore engage the liability of the company — and thus of the buyer — after closing.

Added to this are the risks associated with subcontracting: in the event of a defect or accident involving a subcontractor, the joint and several liability of the contracting company may be engaged. An inventory of ongoing or potential disputes is indispensable. The question of warranties and indemnities in the sale agreement deserves particular attention — we invite you to read our dedicated article: Warranties and indemnities in the sale of your SME: scope, duration and points to watch.

7. Licences, certifications and qualifications

Many construction activities in French-speaking Switzerland are subject to cantonal or federal approvals, to registration in a professional register or to quality certifications. These elements directly determine the buyer's ability to continue the activity without interruption.

Particular points to watch:

• Personal qualifications of the owner-manager: if your federal diploma, your degree or your professional registration is the condition for carrying out certain activities, transferring them is by definition impossible. You need to plan for a qualified holder within the buyer's organisation.
• ISO certifications or quality labels: their continuation after the transfer must be checked with the certifying body.
• Approvals for public procurement: some cantons or municipalities require specific qualifications to tender. An interruption of these approvals can weaken the sales pipeline.

Drawing up a comprehensive inventory of these licences and assessing their transferability is a key step in preparing your sale file.

8. Preparing the transfer: what a buyer examines first

Whether you are selling a masonry firm of ten employees or a civil engineering SME of fifty people, the fundamentals examined during due diligence remain the same. Here are the three pillars on which to focus your preparation:

Normalised EBITDA

Operating profit must be adjusted for exceptional items and non-recurring charges (excessive owner remuneration, rent between related parties, private expenses charged to the company). A reliable, defensible normalised EBITDA is the basis of any serious valuation.

Accounting and legal tidiness

Clear accounts over three financial years, up-to-date articles of association, general meeting minutes in order, employment contracts compliant with the applicable CLAs: these elements reduce uncertainty and speed up the process. To know exactly which documents to gather, see our practical guide: Which documents to prepare to sell your SME in French-speaking Switzerland.

Transferability of the order book and the teams

A buyer does not only acquire assets and a track record: they acquire the ability to generate revenue tomorrow. The real transferability of the order book and the predictable stability of the teams are the two factors that largely determine the confidence — and therefore the decision — of a serious acquirer.

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Disclaimer: This article is provided for information purposes only. It does not constitute legal, tax or financial advice. Any decision relating to the sale or transfer of a company should be preceded by an individual consultation with a qualified lawyer, notary or tax adviser, depending on your personal situation and the structure of your company.