I've run a small commercial cleaning company for 11 years. Personal situation has changed and I need to sell within the next 6-9 months. Not looking for a huge payout, just need to get out cleanly. What is literally the first thing I should do? I keep reading different things and I'm paralyzed.
Exit Strategy
I desperately need to sell my business, what is my first move?
First step is usually getting your financials in order. Not just taxes but a clean P&L for the last 3 years. Buyers will ask.
Why the urgency if you don't mind me asking? Timing changes the advice a lot. If it's health or family, you might want a broker who can move fast. If it's just burnout, you have more options.
Honestly the very first move is talking to a business broker or an M&A advisor. They'll tell you what you actually have to prepare. I wasted three months trying to DIY the valuation before I called someone.
It's a mix. Family health issue and I'm just done. I don't have the energy to run it another two years. I do have an accountant who does my taxes but I don't think he's ever done a sale.
Your tax accountant is not the same as someone who prepares a business for sale. Different job. Ask around for a broker who has sold cleaning or janitorial companies specifichally.
Also pull together your customer list and contract terms. Recurring commercial contracts are the main thing a buyer is paying for. If your clients are month-to-month with no paper, that's a problem you want to know about early.
Before you call anyone, write down what you actually need to walk away with. A number. Not a fantasy numlber, the real minimum. Everything else follows from that. Lots of sellers get led around because they never set that floor.
Agree with green_lantern. Also worth knowing that a 6-9 month timeline is tight but not impossible for a small service business. The ones that sell fast are the ones with clean books and owner responsibilities documented.
One more thing nobody mentioned: get a rough idea of what your equipment and vehicles are worth separate from the business. Sometimes the assets are worth more than the going concern and that changes how you structure the sale
This is helpful. So order seems to be: figure ut my number, clean up financials and contracts, then find a broker who knows the industry. I've been putting off the number part because I genuinely don't know what it should be.
Nobody knows their number at first. Start with what you need to cover debts and live for a year, then see what the market says. The broker will help you calibrate, that's part of what you pay them for.
Just don't sign an exclusive listing agreement on the firts call. Take the meeting, ask what they've sold in your sector in the last two years, and sleep on it. Some of these brokers are hungry and will pressure you.