In other sections of this site we have discussed how to prepare your business for sale, examining the market, using a business transfer agent, and many other topics regarding selling a business. In this article we will look at a specific type of business sale. There are different types of businesses like product sales, manufacturer businesses, online businesses, etc. We will be examining a services business.

A service business is one that performs a service rather than selling a product. The service might be plumbing, accountancy, health care, or even a mechanic service. The key to a successful service business is the knowledge one has. You have an expertise in that service which allows you to run the company successfully. You have been through training programs, university education, and other courses in order to be in that service industry.

It is harder to sell a service business due to the requirements the business demands. Let’s take a look at a plumber. A plumber must go through school and an apprenticeship before they can start their own business. Once the education has been completed they can open that business, try to gain a customer following, and then they will have loyal customers.

If that plumber sells their business consumers may or may not remain loyal. They know the plumber and the plumber’s business. They also know the plumber has the required education. The new owner may not be as good. It can cause issues with the sale. First the buyer may not want to pay the advertised price for the business knowing that they may not have a loyal customer following.

The seller has to make sure that the new buyer will have a properly trained person on staff. If the new owner is not going to be the plumber or main service provider then the seller must make sure someone on staff will be trained to handle the consumers. They have a duty to their consumers to ensure the new person can indeed take care of them.

Another consideration is whether you will want to sell your customer list. You may want to sell the business name, but you might want to keep your consumer list. If you want to keep the list it can make the sale almost nothing in terms of value. A services business is all about your consumers and the name of the business. This means you have to be ready to share your intellectual property.

In a services business sale it is usually the seller’s prerogative to offer that business to an employee. They may have groomed an employee to take over for them. For example, your executive assistant or second person in command might be the one you want to sell your business to. You can approach them about the sale before you look for other buyers. In a service business you may also sell a partial amount of the business to remain a partner or at least retain some interest in the business.