Selling Your HOA Management Company
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Every Business Owner Exits their Business sooner or later.... The Top 3 Reasons for an Exit event are: Retirement, Career change or for Health reasons. DEAL STRUCTURE: The typical HOA Industry Deal Structure is as follows: - Valuation is based on a % of Gross Sales, usually somewhere in the 70-80% range, OR - Valuation is based on a Multiple of Net Profits/Earnings, or EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization), usually 4-5 times Net, based on several factors. - Historically, Acquisition the Purchase Price in this Industry is paid out over a 5 Year Period and require the Owner to work in the Business over 5 Years to achieve full Payout. More innovative Acquisition strategies and faster Payouts are possible....see below for more Information. VALUATION FACTORS: The factors affecting Valuation are as follows: 1. How big is the company and how stable is the Client base? 2. How stable is the staff, and how involved is the Owner? (The less involved the Owner, the higher the Valuation). 3. How systematized is the Business and how well does it use Technologies (the more systematized the Business and the more technologies use, the higher the Valuation). MAXIMIZING VALUE: For more information on Selling Your Company and Maximizing Value, apply for Private Coaching with us here: Private Coaching Application Privacy Policy Disclaimer |