How to Sell a Service Business
A business selling services can amass a large, loyal client base, making these companies valuable to interested buyers. Whether you're looking to sell your service business because you're ready to retire or because you want to invest in a new venture, there are a few considerations to make before moving forward with the sale.
If you want to sell your service business, you may be wondering how to choose the right business broker with experience selling service-based businesses. You may also be concerned about protecting your confidentiality and getting the most you can for your business. At Synergy Business Brokers, we provide the information and support you need so you can proceed with confidence.
Business Brokers Who Can Sell Your Service Business
Synergy Business Brokers has been selling businesses confidentially since 2002. We specialize in selling service businesses with annual revenues between $700,000 to $70 million. We have sold a wide variety of service businesses, including:
- Environmental services
- Advertising agencies
- IT services
- Mortgage brokers
- Land surveying
- Educational services
- Home maintenance
- Managed services
- Residential and building services
- Digital Marketing
- Repair and maintenance
- Property management
- Arts and recreation
How to Sell Your Service Business
Selling a service business is a multi-step process. To successfully sell your business when you partner with Synergy Business Brokers, follow the steps below.
1. Get the Proper Valuation
Getting the right asking price for your business is essential in the sales process. When selling a service-based company, your assets, and liabilities do not tell the main story. There's your cash flow, the number of employees, how skilled they are, how much work they bring in, the types of clients you have, and more.
Many factors go into pricing a professional services business for sale. We will find out more about your business and review your financial information to provide you with a recommended price. There is no fee until your company is sold. Without an experienced Business Broker who can fully assess the worth of your business and give you a reliable estimate, you may be leaving money on the negotiating table when it comes time to price your business.
2. Prepare Your Financials
Your financial records can prove your service company's profits and success. Financial records you may want to prepare before selling your business include:
- Tax returns
- Inventory list
- Balance sheets
- Cash flow statements
- List of intangible assets
- Profit and loss statements
Having all of these documents gathered and prepared can make it easier to pass off your business to the next owner.
3. Hire the Right Business Broker for Selling a Service Business
You want someone who has experience selling professional services businesses and has a pool of potential buyers to draw from for a wide variety of service businesses. Unlike most business brokers, we don't sell retail companies, so our primary focus is selling service companies in a timely fashion for the best possible price.
Our experience in selling B2B and B2C service businesses provides us with the right background to effectively position your company for sale and ensure it attracts the right buyers. Also, our experience allows us to speak the language of niche service industries.
4. Work With Your Business Broker
As service business owners ourselves, we understand that selling a service business is different than selling a product business. We will work with you to develop a marketing plan that will attract potential buyers without giving away the identity of your business until a prospective buyer has signed a confidentiality agreement and provided information on their qualifications to buy your business.
Next, we will guide you through the process as we introduce potential buyers, negotiate offers, and close the deal. Our comprehensive marketing services use social media, digital marketing, our network of contacts, and more to maximize your sale price.
Mergers and Acquisitions for Service-Based Businesses
In some cases, you may also have the option to merge your business with another. While some buyers may be looking to start fresh with a service business, others may be seeking to merge with or acquire a similar company. There are two main types of mergers:
- Vertical mergers: A vertical merger occurs when you merge your business with a company that you supply with services or products or a company that provides you with services or products.
- Horizontal mergers: A horizontal merger occurs when you merge your company with a competitor. This merger could provide you with your former competitor's clients and establish your business as a leading service-based business in the area.
There are several benefits to merging a business, such as:
- Saving money: A merger can save a company money by lowering expenses. For example, there may no longer be a need to rent separate facilities, and both companies can combine their efforts on advertising and promotion.
- Improving efficiency: Merging companies can diminish redundancies, as departments can join together.
- Minimizing the competition: A significant advantage of a horizontal merger is the ability to reduce the competition. When two companies offering the same service join forces instead of working in opposition, they can act as a single, larger entity and reach a more significant portion of the market.
- Growing the customer base: If the companies reach separate demographics or age brackets, they could reach all of these demographics by merging.
- Increasing business intelligence: After two businesses merge, they can experience a boost in overall business intelligence due to the experience of the other company's staff. The merger can also lead to new ways of thinking about or approaching issues.
At Synergy Business Brokers, we can guide you through mergers and acquisitions (M&A). We can identify the businesses with the greatest opportunities for M&A and partner with you to ensure the deal is successful.
Contact Us to Learn How to Sell a Service-Based Business
If you're ready to sell your company and need a business broker with experience in your area, Synergy Business Brokers can help. Since 2002, we have been helping businesses throughout the Northeast, the South, Midwest, and beyond.
We have many years of experience handling mergers and acquisitions for service companies. If you'd like to find out more, you can email Synergy Business Brokers at email@example.com; call us at 888-750-5950 or fill out our contact form, and we'll be in touch to set up your private brokerage consultation.