A diverse range of businesses forms the professional services industry.
This includes but is not limited to accountancy, legal support and management consultancy. All, however, require extensive qualifications and provide specialist support to their clients.
The nature of the sector means that those most suited to working in it must possess a relaxed yet professional manner, excellent communication skills, in-depth knowledge of business trends and practices, decisiveness and efficient time-management.
If you believe you are well suited for this expansive industry, then here is a summary of how to successfully buy, run and sell a business within professional services.
Buying a professional services business
Professional services companies frequently change hands or management via mergers and acquisitions, either joining forces with or falling under the umbrella of another firm.
While many have started successful companies, some entrepreneurs prefer to buy an established business rather than building one from scratch.
The process follows a logical path as with any other business purchase:
- Decide which specific sector to enter – depending on your interests, experience and expertise
- Identify the company you want to buy, by location, price, size and performance
- Approach the business to determine whether you are likely to be able to reach a suitable agreement
- Bring in expert support for valuation
- Create a letter of intent, the non-binding Heads of Agreement document, outlining a broad plan
- Carry out due diligence
- Convert the terms of the Heads of Agreement into the binding Sale and Purchase Agreement
- Complete the purchase.
Each step can feel protracted, but by taking such a high level of care, you can be confident in your business purchase.
The due diligence step alone, for example, involves a number of areas of investigation:
- The standard of management in place
- Profitability and revenue projections
- Potential for retaining existing clientele and workforce
- The company’s position in the market.
All of which should be contained within the documentation a lender would need to see, such as the company’s accounting history, the CVs or profiles of management and key staff, existing buying or selling agreements and a report on the top clientele, including the revenue they generate.
Trends within the industry
Within most professional services, currently email marketing is the height of conversation.
Companies are now gearing this towards compliance with the General Data Protection Regulation (GDPR) privacy law, giving greater control to the owners of any data gathered for marketing purposes.
GDPR will create an opt-in culture; making it vital that marketing includes strong incentives to subscribe, for example with attractive offers and useful links.
Other trends in the industry include efficiency drives such as the use of co-operative workspace or shift systems; known as hot-desking.
This can reduce both costs and waste. Similarly, remote working creates a flexible environment, minimising unnecessary travel and reducing the business’ carbon footprint.
Selling a professional services business
Whatever your reason for selling your business, it’s important to carry out the process efficiently so you can be sure that both you and the buyer will reach a satisfactory deal.
While the steps vary somewhat from one company to another, just five broad stages make up the core preparation:
- Get an objective valuation
- Ensure your accounts are in impeccable order. This forms a large part of your sales pitch
- Streamline your documentation by disposing of unnecessary or out-dated paperwork – It isn’t the buyer’s responsibility to identify lapsed contracts or leases
- Prepare for a seamless handover, stepping back from day-to-day running by implementing a programme of delegation
- Set up a team of legal and financial advisers to supervise the process and protect your best interests
While the type and number of jobs in the professional services sector may fluctuate, it’s inarguable that they are omnipresent and essential – with excellent potential for job security.
Whether you simply intend to work in professional services or own a company employing those who do, you can rest assured that you will be helping individuals and businesses from all walks of life, while enjoying a fulfilling and well-paid career.
Jo Thornley is head of brand and partnerships at Dynamis.
Joining in 2005 to co-ordinate PR and communications and produce editorial across all business brands, she earned her spurs managing the communications strategy and now creates and develops partnerships between BusinessesForSale.com, FranchiseSales.com and PropertySales.com and like-minded companies.