Preparing to Sell your Business

Selling your window cleaning business, you've built over many years is never easy. For many, the hardest part is preparing the business for the marketplace or finding the right time to exit.

You are, no doubt, a skilled professional window cleaner. But as a business owner, you have also invested a significant portion of your life building and maintaining the business…not just cleaning. Rightly so, you probably have an emotional attachment to it. So, to say goodbye in a sale it may feel like you are losing a member of the family and if those emotions are left unchecked, they can have a real dollar impact on the outcome of your business sale. As much as possible, you need to find ways to remain objective, making a good business decision.

One of the most important things you can do to manage your emotions is to prepare a comprehensive exit strategy long before you are ready to list your company in the marketplace. By writing down your exit in advance, you will be more emotionally prepared for the transition if or when it occurs. At some point in the exit planning process, you will need to seriously consider what you will do after the sale has been finalized. Will you retire? Consult? Work elsewhere in the industry? Sellers who lack a solid plan for the next stage of life find it difficult to let go of their businesses and are more likely to allow personal emotions to hijack the process.

Keep in mind, also, you may have your finger on the pulse of the business but a potential buyer will rely heavily on numbers and metrics. Mike Draper, owner of American Window Cleaning Magazine, who previously sold a large window cleaning company in Illinois says “…a buyer is looking for longevity and a track record of revenues and profits.” A potential buyer, bearing much risk, needs to see financial details. So then, ask yourself; “how do my financials look?” Can a potential buyer look at your business’ income statement and balance sheet and make a responsible decision to proceed or are they as mysterious and convoluted as staring at Enron’s financials?

The rewards, though, can be great. Mike Draper, quoted earlier, says “a seller should expect some sort of multiplier of owner’s compensation. For example, compensation from salary, dividends, reimbursements and allowances for depreciation.” Many banks today, with stable and improving revenues, may be comfortable with 3 or more times owner’s compensation.

During the sale process, it's critical to remain focused on operating your business until it has been legally transferred to the new owner(s) since deals can suddenly evaporate during due diligence or other stages of the process. Many deals have compensation tied to retaining customers and maintaining a smooth operation. Each deal is different and can depend heavily your involvement both during and after the sale.

Some buyers desire that the previous owner remain with the business, on a consulting basis, for three to six months after the transaction, to help ease the transition. Chris Lambrinides, who sold his window cleaning business before co-founding the Window Cleaning Resource Association, said “the biggest concern for the buyer was if the new owner could run a company of his size since the buyer was just a two or three-person operation.” A common situation. Make sure that you're emotionally prepared to play this role in a professional manner. Chris, quoted earlier, notes how long it took for him to transition out; “I was 100% disconnected in 6 months.”

J. Michael Tuohey, CPA, Partner at Prince & Tuohey CPA says this, “A challenging decision for most business owners is whether to sell their company as a "Stock Sale" or an "Asset Sale". There are tax advantages to each method and a discussion with your tax/legal counsel should help you decide which is best for you. When you sell your company in an asset sale your intangible assets are taxed at the capital gains rate while all other hard assets will be taxed as ordinary income. In a stock sale, you are doing just that, selling the stock of your company and everything that goes with it. Therefore, the sale is treated as a capital gain on the sale of stock. The point is, talk to a tax advisor before closing the transaction.” Since every deal is unique, it is important you get all the facts before committing. Seeking professional advice through this process will be money well spent.

WindowCleanerLink.com is the Link between buyers and sellers. Our marketplace platform is the easiest and most cost-effective way to connect with other window cleaning businesses looking to buy or sell. Whether your goal is to buy an existing window cleaning business or sell your own, marketplace opportunities are just a click away!