Are you ready to sell your IT company? You may have asked yourself the following:
- When is the right time to sell?
- What is my company worth?
- How long does it take to sell?
- Should I use a broker?
Linda Rose, Technology M&A Advisor and owner of RoseBiz, suggests considering it sooner than later.
“M&A activity is trending toward an all-time high in the technology space, and with the recent statistics pointing to over 40% of technology firm owners looking to retire in the next 7 years, maybe it is time to think about your own readiness to sell.”
If you’ve been struggling with understanding how to sell your IT business or you’re unsure if now is even the time to consider it, Linda has valuable advice for you.
Why listen to Linda Rose?
She has rich life experience and overwhelmingly high business sales figures to make a statement of her expertise.
Linda Rose has a combined career history of 25 years in accounting, partner channel, and ERP application experience, as well as over 17 years of technical infrastructure knowledge. She has the perspective of an M&A Advisor and CEO, using her knowledge to successfully sell off three IT companies (two of which were to Microsoft) at a high dollar.
Linda Rose wrote the highly rated 300+ page book on the technology company acquisition process, Get Acquired for Millions, because she saw the struggles in understanding how to navigate such a tedious process and the potential in guiding struggling IT business owners to success, especially for the lower and middle market.
Get Acquired for Millions is referred to as the ultimate guide to educating business owners in finally finding a successful IT company acquisition by CEOs and business analysts across the board. If you’re looking for advice on selling your IT business so you can take on the next step in your journey, Linda Rose is a high-value expert.
What are the 3 barriers that every IT owner faces when selling their business?
IT business owners don’t fully grasp the value of their business
It’s not about top-line or bottom-line revenue, it’s about gross profit margins and recurring revenue. Recurring revenue is your IT company’s true worth because it speaks of your reputation with your customers and your ability to deliver a quality service. You need to instill consistency in your business for a stable value instead of focusing on giant one-time sales.
IT business owners don’t understand what business drivers lead to sustainable future growth
IT business owners should strive for a consistent value instead of making millions sporadically off giant one-time sales. If you maintain a consistent value, you instill longevity and overall growth for your company.
Remember: buyers don’t buy the past; they buy the future.
IT business owners don’t know what they want to do with their life after they finally sell their business
If this is you, you’re not alone.
In fact, Linda Rose herself didn’t know what to do after her last IT business sale. You can only golf for so long before it gets boring. For her, the solution was to hike 500 miles and clear her head.
During every mile, she thought of that terrifying question: What’s next? The long, challenging trek allowed her mind to wander, and she had a vision. Her journey wasn’t over, and there was still much more to do. Her knowledge was far too valuable to retire with her.
Upon returning, she buckled down and wrote Get Acquired for Millions, and is additionally working on an online course about selling IT companies. It was her calling, and many of her previous clients also found meaning in travelling after retirement.
The seasons of life are all about where you’re heading.
What does it take to sell your IT business?
A good advisor
You need someone who can evaluate your business clearly and educate you during the process. Someone that pushes you during tough decisions and acts as the voice of reason. Someone strong, experienced, and helps you grow even on your way out.
You need a good advisor, and sometimes the best ones available are right in front of you – they could be your clients or other colleagues who already have experience of growing and selling a company.
Understanding your buyer and how they’ll evaluate your company
When trying to sell, many IT business owners will realize the business is not ready, or the market will speak to them and give them a number much lower than they expected. It’s all part of the long, laborious learning process of prepping your business for acquisition, and it takes 3 years if you’re laser-focused on it. This includes housekeeping such as:
- Cleaning up financial documents
- Addressing value driver weaknesses
- Minimize your single points of failure, whether that be customers, vendors, or employees, that actively hinder the growth of your business.
Linda’s best advice for IT CEOS
1. “You really need good mentors and advisors. A good advisor will push you to grow, so be ready to adjust your mindset to allow that.”
2. “Don’t be your own glass ceiling. The glass ceiling we put on ourselves is not the same as the glass ceiling others put on us. Think big, and don’t do this alone.”
3. “Focus – get a coach to help you if you need; and let’s face it, you probably do.”
Looking for more in-depth advice on selling your IT business for the price you deserve? Get Linda’s book, Get Acquired for Millions. It also comes with two free assessments:
- the Value Maximizer Assessment™
- determines your IT company’s current value
- the PREScore™ Assessment
- determines your readiness to exit
Still unsure if you’re ready to take the first step in selling? The first chapter is available on audio for free here!