Selling your property management company is actually quite similar to selling a home. If your firm doesn’t have great bones and tremendous curb appeal, you’ll struggle to get top dollar for the business. Even worse, you could struggle to find a buyer at all.

Even if you feel the urge to retire immediately and make a beeline for the golf course, I suggest that you get out your metaphorical hedge trimmers today, and spend the next 1 to 3 years renovating the company you’ve worked so hard to build.

Taking the following 3 steps will make your property management firm more palatable to potential buyers—while boosting its value.

Selling Your Property Management Company

How to Improve Your Business’ Curb Appeal

#1: Clean (and Know) Your Books

Prospective buyers are going to want to see your financials, and they’re going to ask you tons of questions about them. When that day comes, “I don’t know” won’t be an acceptable answer.

Before selling your property management company, go through your profit and loss statement line by line with the help of your CPA until you can grasp every single detail. You don’t need to become a CPA yourself; but at the very least, you need to know what each line means and why it’s important.

Along the way, identify and write off your “bad debt.” I’ve seen companies that look profitable because they’re carrying five years of back rent. If you evicted a tenant in 1999 and he still hasn’t paid you $5,000 in delinquent rent, it’s time to quit considering that bill an asset. The same applies for vendors. You will want to understand how much money is still owed or collectable in each arrangement.

Another thing to understand before selling your property management company is the difference between accrual-basis and cash-basis accounting. Both methods offer a snapshot of the financial health of your company; but if the snapshots look glaringly different, know how to explain why this is the case.

Finally, before selling your property management company, you’ll want to break out your personal expenses from the company’s overall expenses. This includes your cell phone, your car, and any other items that you’ll keep in your possession after the sale. By doing so, you can show potential buyers that those expenses are really just profits waiting to go into their pocket once you’re out of the picture.

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#2: Upgrade Your Processes and Structure

Make your firm move-in ready by embracing modern technology. If you’re still accepting cash payments from tenants, for example, it’s time to invest in an electronic payment system. Similarly, an out-of-date eviction process and service request system are also red flags for potential buyers.

If your office is peppered with big filing cabinets full of paper records, you’re selling the business equivalent of wall-to-wall shag carpet and wood paneling. The idea of needing to digitize everything immediately after purchasing your firm will send buyers running for the hills.

Lastly—and this is a big one—if you’re a one-person operation, I suggest that you build a small team before selling your property management company. Think of it this way: if you are personally doing all of the business development, marketing, bookkeeping, and evicting, you are the business. If you leave, there’s nothing left.

Contrast that with a firm that has a team in charge of those areas. These folks will stick around and keep the company afloat while the transition occurs—and that’s a lot more valuable to potential buyers.

#3: Prepare Your People

Make sure that your staff is both aware of and excited about the fact that you’re selling your property management company. If potential buyers visit your office and everyone looks depressed and resentful, they’re not going to want to join the pity party.

People are naturally resistant to change, but you’ll ideally be selling your property management company to an entity with greater capabilities than your own. When communicating the situation to your team members, tell them this. Explain how they’ll gain even better resources and job security once new leadership takes over. We’ve seen employees express over-the-moon happiness at the prospect of gaining access to new tools and software—things that make their jobs easier, allow them to perform better, and give them new skills to add to their résumés.

Explain to your employees that the new owner is interested in growing—not dismantling—the company. If you describe the long-term perks that they’ll reap from selling your property management company, they’ll welcome it with open arms.

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None of the above steps will be easy, but neither is property management. If you’re considering selling your property management company, do some extra legwork today to clean up your books, processes, and company structure. This will provide you with peace of mind—which could do wonders for your golf swing—along with a top-dollar valuation.

Next, be sure to read Part 1 of our series on how to sell your property management company: Want to Sell Your Property Management Company? 3 Consolidation Models to Consider