You’ve worked hard to build your contact center business into the success it is today. But just because you’ve decided to sell, doesn’t mean your work is done. Although sellers don’t expect the exit from their companies to be easy, many are surprised by how difficult it can be to get a good price in a reasonable timeframe. Frustrations abound, but many seller challenges can be avoided by considering all aspects of the sale well in advance. Take some time before putting your business on the market to do the following:
Determine the Value of Your Business
One of the most common mistakes first-time sellers make is setting a price before they have determined value. Knowing what your business is worth is imperative, and so is understanding that your business’ value is not the same as the profit or loss it experiences. Because value is subjective – sellers and buyers frequently differ on this point – it’s a good idea to hire an attorney or banker to complete a valuation. Because price is a critical factor in how long your business is on the market, don’t hesitate to enlist the help of other professionals to conduct a thoughtful valuation process. It’s imperative to understand current market prices before determining an asking price. This way, you’ll be able to confidently defend your price in order to get a faster, smoother sale.
Prepare All Financial and Legal Paperwork
Potential buyers usually require at least three years’ worth of financial information, and profession rather than internally-prepared documentation is preferred. Consult your tax advisor about both your personal and corporate tax situations so you understand what options are available with regard to deal structure. Make sure incorporation papers, permits, licensing agreements, leases, customer and vendor contracts, etc. are in order, current and readily available.
Just as you would make improvements to your home before selling it, now is the time to examine all aspects of your business to ensure you get the best possible return on your investment. Of course, buyers want to see profitability, but you can ask a higher sales price by showing increasing profits. Give your business an extra profit boost in the months/years leading up to the sale by identifying new ways to cut costs and increase efficiencies. If time is not on your side for maximizing profits prior to acquisition, be prepared to identify, clarify and defend potential adjusted EBITDA plans.
Buyers want to feel assured that that there will be a consistent revenue flow while they get acclimated to the new business. You can provide this comfort by creating and showing recurring revenue sources that generate gross income for the new owner right away. What’s more, you can give the buyer more confidence by putting in place processes and routines that enable the business to function effectively without your direct involvement.
It’s understandable to want to preserve the business you have built, but when it comes time to sell, it’s important to recognize your role in handing over the reins. It’s rare that a business remains unchanged after acquisition. Knowing – and accepting – this in advance will help ensure you get best price for the sale, while moving the transition along smoothly.
CH Consulting Group can help as part of your acquisition team by making key connections between you and well-positioned buyers. Through years of experience, CHCG has built strong relationships you can leverage to quickly sell your contact center. Even if you have only begun to think about selling, there’s no commitment to find out more about how we can help. Simply fill out the form here, or call Christa Heibel at 218-286-4006, or John Welsh at 267-481-0355.