When preparing to sell your business, what a potential buyer wants is a seamless acquisition process. What exactly does that mean? Well, it really means getting your act together. One of the easiest ways to ensure a successful acquisition – where you are prepared and professional – is to implement an operational software well before you intend to sell your company.
Here are three reasons why investing in software will help sell your business one day (and for the right price).
To get the highest possible price for your business, you need to maximize profitability. This is because a buyer will typically apply a multiple to your company’s operating profit to determine the price they are willing to pay – so, the higher your profits are, the higher price you should get for your business. One of the easiest ways to increase profitability is to upgrade or implement software.
Software will make your business more productive by allowing you to do a lot more with a lot less. Whether it is automating mundane tasks (freeing up your time), optimizing routes (reducing fuel and mileage costs), tracking inventory (turning over containers more frequently), or streamlining billing (ensuring you get paid), software can take on the responsibilities of multiple people in your office, but only for a fraction of the cost of adding additional employees. All these benefits contribute to the bottom line and allow you to maximize profitability.
Implementing software will allow you to make better business decisions with real-time information. Rather than waiting until the end of the year to understand what changes need to be made in your business, software allows you to better track productivity and make adjustments as needed. Losing money on a route? Software can immediately help identify ways to modify your routes, such as increasing route density, adjusting pricing, or improving route planning. Do your containers sit idle at job sites for too long? Software can track how long containers have been out and ensure they are turned over frequently, or at least guarantee daily rental fees are charged. Are customers late on payments or not paying bills? Software can save you hours by automating your billing process, such as applying late fees to customer accounts or flagging customers to suspend their services. These are only a few issues, among many others, that can be identified as they occur, rather than waiting until it is too late by integrating software into your business.
Overall, software is about better understanding your business and taking action with the insights it provides you with at scale you could not achieve using pen and paper or spreadsheets. Individually, these changes may not appear to “move the needle,” but when combined, these changes compound on one another and can make a sizable impact on your business, including the price a potential buyer will pay for your company one day.
Hauling waste is a commoditized service – anyone can buy a garbage truck and start hauling trash – but not everyone can do it well. So, how do you compete in this type of environment? You compete in two ways: 1) price and 2) customer service. For now, let’s forget about price because if you provide exceptional customer service, then price becomes secondary.
Providing exceptional customer service allows you to retain existing customers and win more business – thereby having a direct impact on your profitability and the price a buyer will pay to acquire your company. It may sound unintuitive, but software can help you provide better customer service. By storing details about your customers and their services, alerting customers of changes to their service, or allowing customers to easily pay their bills online, software enables you to do all of this (and more) with minimal extra work on your end. Not only are these ways to differentiate from competition – and potentially win more business through referrals – but a potential acquirer will also analyze the “stickiness” of your customer base and place more weight on revenue that comes from recurring customers. Additionally, if you provide great customer service, you may be able to justify higher prices than your competition (without seeing a ton of churn), which can also lead to an increase in profitability.
Software offers a real opportunity to improve your company’s customer service, which can have a direct impact on the recurring revenue and profitability of your business – both of which are highly valuable to a potential acquirer.
The potential buyer of your business wants a clean, easy, and seamless acquisition process. They especially do not want to be chasing you around for reports you cannot find, or even worse, reports you do not have. This can inevitably stall or prevent a deal from getting done. Not only does software track your productivity, which helps the acquirer understand what they are buying, but also allows you to establish a strong relationship based on trust and professionalism with the buyer. This is especially important if you plan on staying with the company post-acquisition.
Even before getting to an acquisition, you still need to run your company. Instead of wasting hours using various systems to run your business, which likely includes performing double (and sometimes triple) data entry, an industry-specific management software will allow you to manage your entire business from one, centralized system. This type of system is designed to save you time, keep you organized, and reduce administrative headaches.
Selling your company can already be a long and grueling process, but having a software solution in place will make the process easier for both you and the acquirer. Not only does software allow you to be organized, prepared, and professional, but it can also result in increased profitability, improved customer service, and less administrative headaches – all of which will contribute to a successful sale of your business one day.
Basestation is a software solution for waste haulers to save time, stay organized, and reduce administrative headaches. Basestation's software helps haulers with scheduling routes, tracking assets, and billing customers from one, centralized system. Book a demo today to see how Basestation can help set your hauling business up for a successful sale one day.