If you have made the decision to sell your IT support business, you will want to ensure that you get the best price possible for it; after all, you’ve worked so hard to build the business into what it is today.
Despite the fact that thousands of pounds can be added to the value of the company before sale, many business owners fail to capitalise on this and instead go for the first offer they receive in the region they expected.
If you are looking to increase the value of your business before selling, it can be difficult to know where best to concentrate your efforts given the vast number of different factors that impact it.
In our latest blog, we take you through 5 achievable steps to increasing the value of your IT support business before selling.
Review Customer, Staff, and Supplier Contracts
Contracts are a critical factor that will influence how much another party is willing to pay for your business. Contracts can broadly be split into three categories, customers, staff, and suppliers:
- Customers – Customer contracts are generally considered to be the most important when valuing a business. Having rolling, outdated or non-existent contracts means that the buyer has no guarantee that the customers will stay with them when they take the business on.
- Staff – During acquisitions, it’s not uncommon for existing staff to feel uneasy. Without solid contracts in place, there is a higher risk of staff leaving once the acquisition takes place which can have implications on the new owner of the business.
- Suppliers – Contracts with suppliers are often overlooked when preparing a business for sale. Whilst they are less important than clients and staff, contracts with suppliers can help maximise the value of a business by securing pricing with a supplier and thus protecting the new owner from immediate price rises.
It’s important to note that any changes to staff, customers, or supplier contracts should be properly communicated and agreed upon with the other party before they are implemented.
Keep Your Customers Happy
It may sound obvious, but a satisfied customer base commands much more value in a prospective buyer’s eyes than an unhappy one.
When carrying out a valuation of your business, some potential buyers will be looking at reviews in the public domain on platforms such as Google and TrustPilot. They are likely to also take note of what’s being said on social media and may also ask to speak with existing customers.
Beyond providing a leading service or product, improving customer satisfaction often comes through gaining a better understanding of who your customers are, and what they expect from your business.
Before listing your business for sale, a customer satisfaction survey is a worthwhile exercise that can help you understand and rectify any gaps in your service whilst also potentially reducing the chances of customers leaving after the acquisition.
Additionally, the positive customer stories that are likely to come out of this exercise will serve as powerful content that can be utilised within your marketing strategy; this is another area of your business that a potential buyer will be interested in.
Invest in the Latest Technology
Being seen to be at the top of your game and ahead of the competition is a massive asset to your business when looking to sell.
Within technology companies such as IT companies, asset valuation plays a huge role given the number of tangible assets such as laptops, servers, and PCs that IT companies often own.
If your business is in desperate need of expensive new equipment then this will be considered in the final offer you are given by the buyer. On the other hand, if you’ve recently made large investments across the business, they will be reflected in the asking price.
Furthermore, investment in new technologies to provide new services can increase the overall value of your business. In IT companies, this could be in areas such as cyber security, remote working, or cloud services.
Have Your Business Professionally Valued
Having your IT business valued is an essential step for ensuring that you get the best possible price for your business. Valuations give you a solid basis for your asking price and give you an accurate picture of your businesses’ financial health.
To ensure your valuation is accurate, it should be carried out by a professional such as a business broker. Professional valuations tend to offer much greater legitimacy in negotiations vs. valuations that have been carried out internally.
Read our blog post to find out more about the importance of valuations and how to value your IT support company.
Use a Specialist Business Broker
One of the most effective methods of adding value to your business whilst also saving yourself time is using a business broker.
Business brokers can help at every stage of selling your business, from the initial valuation and understanding your business through to preparing it for sale, marketing it to an audience of buyers and managing all the negotiations and legal work on your behalf.
But not all brokers are created equal and finding one that has experience in the IT sector can increase the value of your business further still. Not only will a specialist broker understand your business better, but they will also be able to connect with the right buyers to ensure you get the best price.
Sell Your IT Support Business with Bristol Business Brokers
Whether you are looking to exit as a result of looking for a new opportunity, funding your next venture, or you simply want to cash in on all your hard work – we can help.
To have an honest conversation about how much your IT practice is worth, give one of our team a call on 0117 379 0117 or fill out a contact form and we will get back to you.