A Guide To Selling Your Company In The Security Industry

Thinking about selling your security guard business? : A Guide To Selling Your Company In The Security Industry

Over the next decade, six out of ten U.S. business owners plan to sell their companies, a noticeable increase over previous years. As a result, sale preparation and exit strategy are high priorities for these owners. Preparing to sell means building upon your company’s strengths and fixing any weaknesses in order to secure the best possible purchase price.

How To Plan For Selling Your Company

You should start with being honest about your motives, managing your expectations, and also expecting some challenges along the way. Additionally, make sure that you identify common buyer desires and concerns while also maintaining an open-mind about the process. Taking these basic steps will ultimately put potential buyers at ease when making decisions about their purchase.

Valuation Of Your Company

A buyer’s offer is often put in terms of a multiple of monthly revenue, as well as other qualitative and quantitative factors including:

• The length of time you have been in business
• The quality of the client base and current management
• The percent of contracts with Standard Service Agreements
• The percent of low bid business versus “relationship-based” contracts

What To Expect When Selling Your Company

Most offers today include a cash component to the seller at closing, with the remainder held back for some set period of time as insurance for the buyer that the revenue base remains. Normally, the “Hold Back” amount will be diminished for any loss of revenue unless that loss was a result of the buyer’s actions.

Above All

Adequate preparation can make this very complicated process much easier on you as the seller, as well as any potential buyers. If you are one of these business owners who is thinking about selling your company, start taking steps today to prepare your business for sale. Doing so will help to maximize long-term value and create a more profitable company.

Revised by: Chai Nguyen