Monday, May 01 2023
6 Tips To Read Before
Selling a payroll service business can be a complex process, but here are some steps to consider:
#1: Determine the value of your business: You should start by valuing your payroll business by talking with an independent broker and other owners who have sold their payroll business in the last 12 months. Factors that will affect your value: The number of clients on file, what services you sell to each client, pricing, each client's annual revenue, if a small percentage of clients generate a large portion of your annual sales, etc.
#2: Prepare your financial records: Your financial records should be in order, including your P/L statements, balance sheets, and tax returns.
#3: Find potential buyers: There are several ways to find potential buyers, including talking with a broker, your network, employee(s), back office license holder, and your industry colleagues who have sold their payroll business in the past 12 months.
#4: Interview potential buyers: You should interview potential buyers to ensure they have the financial means to purchase your business and have the expertise to operate it. You also need to determine what will happen to your staff, i.e., being part of the purchase or they need to find new employment.
#5: Negotiate the Letter of Intent (LOI): Once you have identified a buyer(s), you will need to negotiate a letter of intent (LOI). As I tell my brokerage clients, the best deal is when the owner thought they didn't get enough AND the seller thought they paid too much.
#6: Finalize the sale: After negotiating your LOI, you will need to finalize the sale with the new owner. Unfortunately, this is where many deals go sideways, as the buyer starts to add new terms to the agreement, i.e., working capital in a checking account, defining when a client becomes their "client, capping the purchase price, etc.
Important Points To Read:
About The Author:
Glenn Fallavollita is a highly acclaimed keynote speaker renowned for delivering invaluable sales and marketing advice to business owners and sales leaders, enabling them to win more payroll sales and produce more referrals from their database of clients and referral partners.
Additionally, Glenn is the president of SellMorePayroll.com and Drip Marketing, Inc. and has written 50+ whitepapers and three sales/self-marketing books, Supercharge Your Payroll Sales NOW!, Stop Whining AND Start Selling, and Drip Marketing: A Powerful New Marketing Strategy That Gets Prospects To Buy From You. He also writes blogs for LinkedIn and other national websites.
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