Every bookkeeping business should have an end game as part of its business plan. Having an exit strategy means knowing when and how you plan on getting out of the business. Are you planning on just walking away? Do you want to sell the business? Do you want to merge with another business?
It is important to know this because it allows you to run your business more effectively so that when it’s time to draw the curtains, you’ll have increased the salability of your business and you’ll have gotten the best possible price.
To get the result you want, you’ll have to plan early. Start by thinking about your 5-year and/or 10-year plan. What do you want to achieve by the end of that period? What are your business goals? Do you want to automate your systems so it can function without you? Do you want to build an awesome client list?
Once you’ve answered these questions, you’ll be able to determine what systems and standards you want to establish for your business. Over the course of five or ten years, build client relationships and set-up your intellectual property. These are your templates and checklists, including the practice management software you use. As you come nearer to your target time of exit, you’ll have to extricate yourself from your business slowly so that your clients will know that the business can run well without you.
You also need to ask yourself how much would you like to get for your business. Get the help of a business broker to help you in valuing your business. In my experience, they will look at your Gross Sales and be multiplied by a rate according to many factors, such as cloud software, billable rate, how much day to day involvement by the owner and how automated are your systems.
When the time to sell comes, you’ll have to find the right buyer who’s a good fit for your business. You have three main options: an accounting firm who wants to add a bookkeeping arm to their business, another bookkeeping business looking for expansion, or a buyer who wants your client list. If you’re having a difficult time finding a buyer, you might want to consider hiring a broker who specialises in bookkeeping businesses.
I sold my business in 2015 and can assist you in preparing your business for sale whether it be within 12 months or 5 years. Don’t hesitate in contacting me on 0414 823 862.
Katrina Aarsman (BAcc) built a successful bookkeeping business over 15 years and sold in 2015. She now focuses her energies in helping other business owners grow their bookkeeping business with an emphasis on automation. Katrina offers customised mentoring programs, strategy sessions, and webinars. She would love to connect with bookkeepers with a desire to grow.