At some point in the future, you will likely be faced with the decision of selling your janitorial company. Maybe you will reach retirement age. Or perhaps you will reach a plateau that you aren’t prepared to rise above. Whatever the reason, we should always be building our business in such a way that is attractive to a potential buyer. Not only will this make the business run more smoothly, it will make the business more sellable when the time comes. Let me offer three tips to help increase the attractiveness of your business to a potential suitor.
Make Yourself Unnecessary
As my company looks for other janitorial companies to purchase, owner involvement is a key risk factor. The more involved the owner is in the day-to-day of the business, the more risk for the purchaser. And be sure of this: more risk equals a lower sale price. The more you can make your business run without you, the better your chances of getting a better price.
Get Your Financials In Order
Financials documents, specifically the P&L and balance sheet, tell part of the story of your business. However, when they are not an accurate representation of what is happening, buyers will get very nervous. To make a purchaser comfortable, you need 2-3 years of accurate financials. Good data means less risk. Less risk means a greater purchase price.
Acquire The Right Mix Of Customers
Finally, your company only has value if your client mix is desirable to a prospective buyer. As a general rule, companies looking for an acquisition want bigger customers. The bigger the better. Try to acquire as many accounts as possible over $3,000/month in revenue.
If you are an uninvolved owner with clean financials and a solid customer mix, you will have no trouble selling your company when the time comes.