I've been involved in hundreds of M&A transactions over the past 10 years and I speak with a lot of entrepreneurs who have no idea how much their company is worth....
Below are a few action items that can add major value when you go to sell your company!
1. Assess The Value
There are some basic questions that all IFA businesses should ask when considering their value...
What are your sales? What is your revenue? How much of that is profit? How stable is the growth? How efficient are the systems you have in place? What (or who) does your business rely on? How are you doing relative to your competition? What will the market look like in the immediate future? What are the risks involved?
Answering these questions is essential in evaluating your business and will impact the amount you can sell it for.
To discover the 8 key metrics that determine the value of your IFA business, download our complementary eBook by clicking here.
Depending on the size and age of your business, you can expect to sell your IFA business for between three and four times your annual recurring revenue.
But you want as high as you can get...
2. Time It Well
Depending on the circumstances leading to the sale, you may have the luxury of being able to time it correctly.
If you do, sell your IFA business at a time when its profitability has been on a steady incline for a while.
If profits have begun to dip, potential buyers will be suspicious.
A business that looks like it is still growing will be a much more attractive investment.
It is tempting to hold on for a little while longer to reap the rewards of that huge contract you just closed. Don’t.
Sell when the perceived value of your business is at its highest.
If you have just secured a great client or received some good press coverage, now is the time to sell.
3. Optimise Your Systems
Running your business most efficiently should always be on your mind.
This is no different when you are trying to sell.
Is there a faster way to get things done? Implement it. Update software. Tie up any loose ends.
This is of course not the time to make a major investment, but optimise where you can.
Make sure everything runs like a well-oiled machine and potential buyers will be happy to throw extra money at you.
This is just one of the essential keys required to groom your IFA business for a premium offer...
... Discover the others by investing a mere 10 minutes of your time into reading this "highly useful and informative" eBook by clicking here.
4. Clean Up Your Books
Anyone interested in buying your business will be interested in the financial records.
Make sure they are organised and tidy.
Your taxes should be sorted out and your credit history should look good.
If you have any loans or debts, make sure to pay off as many of them as possible.
If you are working with a nonstandard bookkeeping system, make sure you standardise it.
Anyone taking over will not want to spend time deciphering any odd financial records.
Well-organised records will increase the value of your business.
5. Think Ahead
Imagine you want to keep growing your business.
What is your plan for the future? In which direction do you see your business heading? Are you preparing for any changes in the market?
These are questions potential buyers will want answers to.
Demonstrate a solid plan for growth that they can follow.
And once you have done everything to sell your IFA company for maximum value, don't ruin your hard work by failing to capture the right buyers interest...
Use the "sweet sixteen" key things that buyers are interested in (available for free by clicking here) so that you can make sure you are always the preferred option.
Best wishes,
Steve Hagues, Founder of Retiring IFA
PS. Discover the seven steps to selling your IFA company here.
