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If the time has come to sell your software as a service (SaaS) business, the process can be particularly challenging. Whether you want to move on to new ventures, take a step back, or retire altogether, many SaaS business owners do not realize just how complex the selling procedure can be.
To avoid any nasty surprises and ensure you have the right people helping you along the way, here are some valuable tips on how to sell a SaaS business.
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1. Know Your Value
Once you’ve decided to sell your SaaS business, the best place to start is by valuing your company. If you have spent many years building your brand, you may have no idea just how valuable your business is. Understandably, you’ll want to get the right asking price for your company.
So, if you are having difficulty reaching a realistic value of your business, speaking to a business evaluator is key. You need to have realistic expectations when it comes to valuing your SaaS business. This will ensure you know where you stand and that you get the deal you’re asking for.
2. Find an Experienced Advisor
Navigating through the sales process alone can be highly daunting. So, it’s wise to find an experienced advisor who can be by your side from beginning to end. Advisors can clear up any confusion and ensure everything moves in the right direction.
You’ll likely have all sorts of questions regarding the sale. These can be addressed with an experienced advisor. Once you find a reputable advisor, they’ll have a great network that will help you choose a SaaS business buyer and assist with negotiations.
3. Systematize Your Company
SaaS companies normally require a high level of technical competence and knowledge to run when compared to other business models. The more challenging your brand is to manage and run, the fewer buyers and investors you’ll have swarming over your brand looking to take over. This is because most buyers and investors want a company that’s easy to manage.
Once you begin preparing to sell your SaaS business, you should remove yourself from the forefront immediately. You should start devising detailed step-by-step procedures and processes for your company. Once you have simplified documents and checklists to follow and adhere to, this will allow anyone with the correct technical experience to follow your orders.
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4. Organize Your Books
One of the main advantages of a SaaS business is recurring revenue. However, just because your brand is growing and you’re seeing an increase in revenue, does not mean that buyers are going to say yes to the deal. Buyers are focused on the bigger picture and will need to know what percentage of your revenue is actually profit.
There are other factors to take into account, such as your average growth rate, costs to gain customers, and your rate of churn. When getting your books in order, the two crucial things to bear in mind are maximizing revenue and minimizing costs.
5. Optimize Your Customer Support
Your customer support is vital for the success of any SaaS company. If a high number of complex questions are constantly spamming your email, ticketing system, or help desk, you’ll find buyers aren’t likely to go through with the sale. Great customer support is paramount, so before selling up, you should identify what kind of software you’re using to manage customer questions. This can include live chat, an FAQ page, or videos.
Before selling your SaaS business, taking the above tips into account will help simplify the process and deal. Regardless of the size of your company, the sales process can be incredibly complex, so consider using an advisor to guide you through the sale from start to finish.
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