With a projected market value of over £55 million in 2021, the IT services market has become an extremely lucrative opportunity in the UK that has been buoyed on by increased demand for remote working and companies choosing to outsource their operations.
As a result, we have found a high demand for IT support companies for sale, with existing businesses looking to grow their operations through acquisition rather than relying on organic growth alone.
This increased demand now makes for a very attractive time to sell an IT support business. If you are the owner of a business in the IT industry, read our latest blog post to find out more about selling your company and how to get the best deal.
Why People Choose to Sell Their IT Business
There are several reasons why business owners choose to sell. In our experience, the most common reasons for selling include:
- Changing Technology – As technology and best practice changes, some business owners choose to sell rather than make further investment. In IT, recent advancements and considerations have included cyber security, cloud services, and expensive ticketing systems.
- Retirement – After running a successful business, many choose to sell in order to fund their retirement.
- Ill Health – Unfortunately, ill health or duties of care for family members is a reason why people choose to sell their business.
- New Challenges – Once a business is established, many entrepreneurs are on the lookout for new challenges and may sell to fund the creation of a new business.
- Legislation – In some cases, new industry legislation will be the motivation for selling the business, with owners preferring to sell than deal with the workload involved with making potentially significant changes to the way their business operates.
- Competition – In an industry such as IT that is extremely competitive, business owners may choose to sell their business to a competitor if they feel their market share will be threatened or know they can leverage a higher price for their business.
What Factors Influence the Value of Your IT Business
The value of your IT business will be determined by many different factors, each of which should be properly considered to ensure you get a fair price for your business. The most common factors include:
- Profit – As well as the amount of profit your business is creating, a valuation will also consider the rate at which this is increasing (or decreasing) over time.
- Location – Whilst location is less of a consideration for IT businesses in the present day as work can be done remotely, the location of the business will have some impact on the types of customers they can attract.
- Staff – The staff you have employed and what contracts they have in place can have a positive or negative effect on the value of the business.
- Customer Contracts – The type of contracts you use will impact the value of the business. For example, customers of fixed retainers will increase the value more than those that are on pay as you go support contracts.
- Equipment and Services – The investment in equipment and services you offer will both be taken into account during a valuation.
- Competitor Activity – Your competitors, their activity and the market share they hold versus your business are all likely to be considered.
For a more in depth look at what factors are taken into consideration when valuing a business, take a look at our blog on maximising the value of your business before selling.
Methods of Selling an IT Support Business
When you first start looking at ways to sell your business, you may be overwhelmed by the number of different platforms currently available.
Beyond business networking groups and word of mouth, there are also modern mediums such as social media and even dedicated online marketplaces designed for the sole purpose of buying and selling businesses.
Whilst each of these methods for finding buyers has its own advantages, it takes more than advertising alone to proceed with the successful sale of your business.
After a suitable buyer has been found, negotiations must be carried out, a deal must be struck and the proper legal process followed to ensure the sale is official.
For these reasons, many business owners choose to engage with a professional business broker to support them with finding the perfect buyer.
Why Use a Business Broker?
With so many avenues to sell your business, it may seem like there is no need to rely on professional support. However, all of the methods have limitations and using a broker offers unique benefits such as:
- Find Your Ideal Buyer – As well as finding a buyer that accepts the asking price, a business broker can use their expertise to ensure the buyer shares your values and ambitions for the future of the company.
- Sector Expertise – Business brokers that specialise in your industry understand the unique challenges (and opportunities) that are present.
- Negotiations – Having a business broker handle negotiations for you gives you a better chance of reaching an outcome you are happy with.
- Maximise Value – Ultimately, getting the best price for the business is the top priority for most sellers; a business broker can help you achieve this.
- Time – Using a professional can save you time at every step of the deal and enables you to focus on your business whilst negotiations are undertaken.
- Marketing – Established brokers will have reliable marketing strategies proven to get your business in front of the right people.
Start a Conversation About Selling Your IT Business
If you are interested in finding out more about selling your IT business, contact our team today to have an honest, no-obligation conversation with an expert.
To get started, call today on 0117 379 0117 or fill out a contact form and we will get back to you.