Recently, we shared some insight on how to determine the value of your property management company. This is an important business task, particularly when it comes time to sell. Whether you’ve reached retirement age or you’re just looking to exit the industry and pursue other ventures, there are certain critical steps and scenarios to consider before sellling your business. Let’s take a look at a few of these things below.
First, take a look at the market.
Just as it is with selling a home, to make the highest profit when selling a business, you need to first evaluate the market to determine whether or not it’s in your favor. If your property management company is profitable and there is an ample pool of buyers, then it may be time to pull the trigger. If not, perhaps waiting things out would be a wiser decision.
Determine the best way to sell.
Not all business sales are handled the same way. Sometimes, a buyer will purchase the business and the owner will take the money and run. Other times, the buyer may agree to make payments over a specified amount of time, during which the seller stays on to assist with the transition. The third option is for the buyer to pay the seller in stock and hire them to continue working with the company, typically in an executive role. You’ll need to think about which of these scenarios you feel most comfortable with.
Tie up as many financial loose ends as possible.
It’s not uncommon for a business to be sold with its existing debt, however, if there are any outstanding balances that you are able to pay before you sell, it’s a good idea to do so. The fewer the liabilities, the more attractive your property management company will be to potential buyers. It’ll also be a much more favorable option with their lenders and investors.
Notify all stakeholders as soon as feasible.
At various stages of the sales process, there are parties who should be informed of your intent. For instance, your employees should be aware that ownership of the business may be changing hands. At some point, you’ll also need to notify your customers and provide them with information on next steps and what to expect. They’ll appreciate being kept in the loop. It’ll also make for a smoother and more positive transition for everyone.
The property management industry has seen tremendous change over the past couple of years. Understanding the value of your business and knowing what steps to take can help make selling much easier should the opportunity present itself.