5 Factors that Affect the Value of a Business in the Financial Services Sector
Commercial business sales Cerritos for businesses in the financial services sector is different. The evaluation and process of selling such businesses differs from that of selling other businesses. In our experience at So-Cal Business Brokers, the approach used in the evaluation and sale depends on the firm’s specialization, gross revenue, accounts under management, EBITDA and a range of other factors. We have helped sell many businesses in the financial services sector and can help you sell your firm fast and for maximum profit.
Even before we start working with you, we love to educate you on commercial business sales Cerritos. If you are considering the sale of a business in the financial sector, here are the five factors that we believe concern savvy buyers during the sale. Learning how to handle these factors will ease the concerns of the buyer and make your business more competitive.
The majority of financial firms are built on strong client relationships. They thrive on recommendations and great reputation. In our experience, the concern that most buyers have is that of losing clients after the transfer of ownership. If a huge percentage of your firm’s revenue relies on one or two clients, buyers will be more scared of buying your firm. In this case our first objective will be helping you diversify. We make sure you don’t rely on a single client. We also refine your management so that clients will not be scared by the idea of new ownership.
The question we will want to answer here is if your firm is set up in a recurring revenue model. If the answer is yes, then selling it will be easy. The recurring revenue firms can be valued depending on the gross revenue or the recurring monthly revenue. This will greatly increase the value of your business.
An option we highly recommend in order to speed up the sale of a business is for you to offer earn-out or seller financing. We have learnt that offering seller financing in commercial business sales Cerritos significantly increases demand. We recommend seller financing when selling a business in the financial services sector because such businesses generate a lot of transaction concerns from buyers because of the high touch and the importance of client relationships.
Types of clients represented
The type of clients you work with will determine how fast you sell. Do you specialize in B2B or B2C services? Do you work with young couples getting started or high-net-worth families? The type of clients in your book can increase or decrease the end results of a business valuation.
Business model structure
Having a solid business model structure is crucial to buyers who are searching to buy a financial services company. Is your firm commission-based or fee-based? Are you a broker and who are you affiliated with?
There is a lot you need to work on when getting ready to sell your firm. Our team will guide you every step of the way. Schedule a free consultation to talk with one of our experienced business brokers in Los Angeles.