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How to get the most when selling your business |
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Monitoring -
Features
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Written by Jennifer Brown
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Friday, 18 January 2008 10:39 |
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Page 1 of 2
After building a company for a decade or more, deciding to sell it off can be a stressful situation that produces mixed emotions. After all, you’re ending relationships established with customers and staff as well as trying to get the most financial gain you can from something you’ve invested all your energy and money into.
Greg Taylor knows exactly what that’s like. Today, Taylor is an
investment advisor with TD Waterhouse in Mississauga, Ont. But 10 years ago
he was immersed in the details of evaluating customer accounts and
arriving at the true value of his company so he could get the most from
a buyer. So with one foot in a new career and the other still firmly
locked in the company he had poured so much into, he started picking
his way through the prickly path of selling an alarm business.
“I had always been interested in the financial markets but because
like most alarm dealers I was totally absorbed in running my business,
I didn’t participate in it much. When I started to have capital I was
plowing everything back into my business. But slowly I started getting
interested in trading the last few years I was running my business,”
says Taylor.
That was 1997 and Taylor felt the timing was right to sell his business
and make the leap to becoming a financial advisor, but he still had
concerns about how best to approach selling his business.
“I had put my heart and soul into building this business and I
discovered that at no point can you compromise yourself – this is your
baby and you want to make sure everything is handed off well and you
hope they care about those clients as much as you did,” says Taylor.
When he started getting interested in the financial markets Taylor
decided he wanted to change careers and he sold his company, Taylor
Security, to Voxcom. He had been in the industry for 15 years, working
for another firm for five years before starting his own company. He was
34 years old at the time and while relatively young, had focused on
developing a business that made customer service a priority. He was
proud of what he had built and not only wanted top dollar for his
company, but wanted to make sure his clients would be taken care of as
well.
The process of selling his company became an intensive learning
experience. Even though he obtained the services of a lawyer to go over
the 200+ page contract with him, Taylor says the lawyer didn’t know the
ins and outs of the security business and so he had to be the expert.
Taylor’s alarm company was modest in size, about 15 employees and just shy of 2,000 accounts (50/50 commercial/residential).
“The timing was excellent because I sold at the top of the market,”
says Taylor who had watched the industry go through its highs and lows.
“I had known when I first got into the industry what the multiples used
to be like and they kind of went a lot lower during the recession.
Around the time I started considering it the multiples were really
high.”
Typically, in a good market, a buyer would pay $750 to $1,000 for a
client paying $25 a month based on the fact the client has a signed
contract with the company.
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