General contracting businesses in Illinois are valued at 2x to 5x SDE or 0.3x to 0.6x annual revenue, with significant variation based on project type (residential, commercial, government), bonding capacity, backlog quality, and whether the business can operate without the owner's personal client relationships.
Backlog and Pipeline
The signed backlog — work contracted but not yet completed — is a tangible future revenue asset. A GC with $3M in signed backlog is worth more today than an identical business with an empty pipeline. Buyers will review all contracts, payment histories, and margin profiles during due diligence. Work-in-progress schedules and surety bond relationships are closely examined.
License and Bonding
Illinois contractor licensing requirements vary by municipality. The selling contractor's license may or may not be required for the buyer to operate under. Surety bonds and the bonding capacity of the business are critical for commercial contractors — buyers who lack bonding relationships or track record may need to build these post-acquisition, which affects the transition plan.
Client relationship dependency is the most common value risk in GC businesses. If major accounts are tied to the owner's personal friendships, a thoughtful transition plan and potentially an earnout tied to revenue retention may be appropriate.