The design and build business is more of a contractor business wherein you execute the whole end to end project. Its focused on retail and commercial fitouts work ranging from civil n interior, hvac, electricals, etc.,
This business has no entry barrier and you have to block your working capital to churn revenue. If you are ready to invest in Working Capital then you can take as much business as you want.
Project completion and handover is the other critical issue wherein the customer never gives timely clearance and you’re taken for a ride to recover your own money. Snags list from client is forever coming and an usual 3 months project is fully completed in 5-6 months. Also, the retention of 5 percent on all contract is another blocker.
In short, this business will not command a high PE multiple as compared to a niche business or a consulting business.
Hope this will help the fellow members!
| Subscribe To Our Free Newsletter |
