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Selling a Business with Recurring Revenue

If you are selling a business with recurring revenue you are in a good position. Everybody in the business industry loves recurring revenue, sellers and buyers alike. Recurring revenue is a stabilizing force in positive cash flow, a signal that portrays the potential for growth, sustainability, success, and overall business stability. These factors make recurring revenue an attractive factor to business sellers and buyers. Recurring revenues can benefit you and your business in the following ways.selling a business with recurring revenue

Demand Evidence

If you are selling a business with recurring revenue it will be valued higher than other similar businesses without recurring revenue.  Some examples of recurring revenues are active subscriptions, monthly or annual maintenance fees, SaaS licensing, recurrent customers for a long period of time, long-term projects underway and frequent customer/ client requests is an advantage.

Recurring revenues puts across the message that you have consumers who support ongoing income generation. Showing a prospective buyer that your business has the potential to sustain and increase recurring revenue will increase the odds in your favor. Also, it shows you are offering a product or service the right way and that demand is consistent.

Build Buyer Confidence

When selling a business with recurring revenue buyers will have more confidence to go ahead with a business transaction and count on success from the word go. When buyers consider buying a business, nervousness may take the best of them and an assurance of revenue happens to be a remedy. Knowing that even if they made little to no effort to develop the business it would still bring in revenue, buyers will feel comfortable with the deal on the table and increase the chances of closing a deal that is favorable to you as a seller.

With recurring revenue, buyers find it suitable and helpful during management and planning for future expenses, determining financial growth projections and viability of the business in the long run. The ability to show this just increases the buyer’s stability in their decisions and confidence in the business and will help to close the deal.

Know your Recurring Revenue Metrics

When Selling a Business with recurring revenue, it is important that you determine what percentage of your business is recurring revenue, how long your customers have been with you, are their contracts in place, etc.  We want to help to develop a business marketing document that showcases that your business delivers exceptionally in matters of operation, customer service, and marketing, in short, your business has aligned itself strategically.

Consult with a business broker, they have the right expertise to help you reveal the best aspects of your business and put them in the limelight for prospective buyers to see.

ABOUT SYNERGY BUSINESS BROKERS

Synergy Business Brokers is a leading Mergers & Acquisitions firm focused on selling companies with annual revenues of $700,000 to $40Million. If you are considering selling your business, we offer a confidential consultation to learn more about your business and provide you with a recommended asking price. For: healthcareservicesengineering, educationtechnologydistributionconstructionmanufacturing,  and transportation industries. We have experienced Senior Brokers in MA, NY, NJ, and CT and sell businesses around the US.

For a confidential consultation please fill out our Seller Registration form, call (914) 738-9350 or email [email protected]

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