Understanding the Value of your Estate Agency Business
So, you have spent years building your agency business to a healthy size, you can see yourself looking for an exit and planning for early retirement and enjoying more of life outside the business? Great, as this little blog will give you an insight into how what you need to think about before you start officially marketing your business on the open market.
The first thing that is visible is your office location, is it a prime area covering a busy postcode and do you have a good base of clients that have been on the books a while now and are referring over other clients? This can be a real make or break when you are looking to go to market and the first thing that most potential buyers will look at.
The internal process, how do you run your business now? Is it heavily based on staff doing being in the office doing the day-to-day with paper-based admin and non-tech-based offerings? Does your business solely rely on providing other services such as finance and insurance? All of these will be a value add services and on top of general day-to-day compliance ( check out The professional body for the property sector | Propertymark for a good insight into professional standards) contribute to the overall value of your business.
How easy is it for another buyer to take over and pick things up as they are to enable day 1 capability? By having a connected system in place, you can make it very attractive to potential buyers as this will reassure them that there is already an infrastructure embedded making it less of a hassle to get started. @ Lofti is already helping agents in the lettings industry streamline and automate their day-to-day tasks, giving businesses more time to focus on expanding their offering and improving the overall service to all members of the property ecosystem. This includes helping with partner services such as finance and insurance, enabling value to add to the clients of the agency and increasing revenue. (Not bad, eh?)
Now, if you are happy with your agency’s service offering and book of clients, you will naturally attract interest from many buyers. It is worth understanding their position just as much as they want to understand yours, what is their motivation? Are they new to the market? How are they planning on financing the purchase? The sales process can become complicated and messy at times, which puts a lot of focus on understanding your buyer and how reliable the interest really is.
It is also worthwhile seeking professional advisors in these deals to ensure that you are considering all sides of the deal and that you walk away with the right outcome. There will be many advisors on the market so it is important to have your business case in order with all the relevant information about your business – you need to make sure you know everything inside out so you can expect the very best outcome.