How to transition out of your real estate business.
Running a real estate agency is an exciting and fulfilling career, but there is no denying it takes a lot of hard work! Ask any real estate principal what their hobbies are and chances are they’ll laugh - who has time for play when you’re working six and sometimes even seven days a week?
No matter what level of success you have achieved for your real estate business, there comes a moment when the time seems right to move on. When this is the case, selling is an option.
What many agents and principals don’t realise is that succession planning is not an instant process. The reality is that to get the best return you need a lead-up time of three to five years. This gives you time to think, plan and prepare.
There are a lot of options when selling a real estate agency. These include:
Selling up completely - either to an independent operator or a larger franchise.
Splitting your real estate business and selling it off in pieces (this is common if the business is quite large).
Selling but staying involved - an option if you want less pressure but still want to have a hand in the business.
Selling to an employee (so long as they have the necessary management skills to take on the job).
Passing the business on to a family member who is excited to drive the business in the right direction.
The reason for selling and the way you go about it is entirely up to you. In the leadup, however, you will need to do some groundwork in order to maximise the value of your business and attract more interest from buyers.
The steps you need to take include:
Deciding why you want to sell and outlining a basic timeline for doing so.
Doing a stocktake of business assets, including your rent roll, your contact database, your office space and equipment, your staff and any other vehicles, property etc.
Taking care of problems or issues that may reduce the value of your business (e.g. landlords who take up too much of your time or old equipment / systems that require updating).
Working with your accountant to prepare profit and loss records going back several years.
Preparing forecasts for profit and loss in the future.
Coming up with a price for your business based on location, profitability, demand and other factors.
Engaging a solicitor to take care of the necessary legal steps.
Preparing to market your business to the right buyer.
As part of the process you will also have to get staff involved, making them aware of imminent changes and consulting with them along the way.
The more time you are able to spend discovering and proving the true worth of your business, the more likely you are to be able to sell for a premium price. Getting the right advice from someone experienced in the selling of businesses is crucial in order to prevent making mistakes that could set back the process or end up costing you thousands.
BDH Solutions have been buying and selling rent rolls for over 30 years. Keep up with our latest listings here.