July 2025
HOW TO PREPARE TO SELL YOUR COMPANY
This month, we are focusing on some logistical steps that owners can take to prepare for a potential company sale. (Next month we’ll be focusing on how to decide if you are ready to sell your company).
1. Get Your Financials in Order
Buyers want transparency. Start by preparing at least three years of clean, organized financial statements in a format that is typical for the industry – profit and loss, balance sheets, cash flow reports, and tax returns. If your books have been casually managed, now’s the time to hire an experienced accountant to clean them up.
Pro tip: Buyers in the security industry pay close attention to gross margins, overtime costs, and recurring contract revenue. Highlight stability.
2. Audit Your Client Contracts
Strong, long-term contracts with reputable clients can boost your valuation. Review your service agreements to make sure your client contracts are all written with accurate terms (service hours, rates, etc) and most of all are current (not expired).
Consider renewing any expired or expiring (within 6 months) contracts before listing your business.
Make sure your customers are satisfied! Unsatisfied customers will leave in the midst of a transaction and hurt enterprise value.
3. Assess Your Team & Licenses
Security businesses rely on licensed personnel and state compliance. Ensure all personnel have up-to-date licenses and training. A well-trained, loyal team with low turnover adds value.
Also, confirm that your business license, insurance, and certifications are current.
4. Reduce Owner Dependence
If your company’s success is overly reliant on you, buyers may see it as a risk. Start delegating:
- Unless you plan to continue long term after the sale, prepare your managers run day-to-day operations, subject to your oversight
- Document systems, procedures, and training processes
- Strengthen your management structure
5. Understand What Buyers Want
In the security guard industry, buyers typically look for:
- Stable monthly recurring revenue (MRR)
- Balanced commercial or government contracts
- Industry reputation and client satisfaction
- Scalable operations and trained staff
- Robust sales pipeline
The bottom line is that the buyers will be attracted to companies that have a solid infrastructure and an easy transition. Security Pro Advisors can help you prepare to maximize the value of what is often your largest asset.
While Security ProAdvisors can help you at any time, ideally talking with us 1-3 years before a sale allows us to position your business to maximize value on exit!