There comes a time for many business owners when they have to decide whether to keep their business or sell it to the highest bidder. Whether you’re nearing retirement and don’t have an heir to take over, you’ve lost your passion for property management, or you’ve just reached the point where selling makes the most sense, there are certain best practices that can help make the process smoother and less stressful. Let’s take a look at five of those steps below.
Start preparing now.
Even if it’s not until years down the road, if you plan on selling your property management company at any point in the future, you’d be wise to start preparing for that eventuality now. Start by getting your books cleaned up and organized. Make sure you’re accurately tracking expenses and in their proper categories. This will ensure a clear understanding of your P&L. Focus on keeping accurate accounting records right from the start.
Make sure your company can run without you.
If you want your property management company to be attractive to buyers, you’ll want to make sure it can successfully run without you (even if you plan to stay on after the sale). To do this, start by creating processes, methodologies and best practices for each employee and team. Clearly define and document roles and responsibilities. You want your business to run as a company, not a place where everyone depends on you.
Figure out the best time and strategy to market and sell.
Just because you’re eager to sell your business doesn’t necessarily mean now’s the best time. There are a lot of factors to consider, including your company’s profitability as well as the state of the property management industry as a whole. You’ll also want to assess the playing field to determine what buyers are currently looking for. As an example, current interested parties might be more focused on growth potential than revenue. Figure out what’s likely to catch a buyer’s eye and focus on that.
Get ready to negotiate.
Once your company’s ready to sell and you’ve determined that the time is right, it’s time to start reaching out to brokers and prospective buyers. You’ll also need to prepare yourself for what’s most likely going to involve some tough negotiations. Most buyers don’t come in at asking price, so don’t be surprised if you get some low-ball offers. When this happens, it’s important not to let emotions cloud your judgment. Don’t be afraid to stand your ground, but be realistic about what your company is really worth.
Be ready to move on.
Last, but not least, you need to prepare yourself for what you plan on doing once you’ve successfully sold your property management company. Do you want to stay aboard in your current role or maybe take a step back and participate in a more hands-off way? Maybe you’re just itching to leave it all behind and move onto the next chapter in your life. Regardless of what your future plans are, you need to be ready to pull the trigger once that time comes. This can be difficult, but stay focused on the end goal and be proud of what you’ve accomplished, which was a successful sale.