Having a high percentage of your revenue tied to one customer is often seen as a major risk.
In the renewable energy industry, however, this is not the case.
While it will certainly narrow your prospect pool, a high customer concentration should be seen as an opportunity instead of a shortcoming.
In fact, our vast network of strategic, financial, and allied buyers allowed us to quickly find an interested buyer and successfully sell a renewable energy business with a 96% customer concentration for far more than the owner’s expectations.
However, selling a renewable energy business is a complex task. You’ll need to understand where your position is not only financially, but competitively as well.
We know this process can be quite overwhelming, so we’ve put together these 6 tips to help make the process a little less cumbersome for you.
1. Timing is everything
Because of how the Biden administration is treating the renewable energy industry, your profits are likely in good standing at this time. Since current favorable tax benefits won’t be changed under this presidency, renewable energy businesses are selling at a premium these days.
The country as a whole is getting behind this industry and piquing the interest of private equity firms. As long as you’re ready to exit, there really isn’t a better time than the present to think about selling a renewable energy business.
2. Sell when there are more buyers than sellers
After selling the aforementioned renewable energy business, we’ve received a steadily increasing number of calls and emails from several buyers looking to purchase a business in this space.
Thanks to a variety of factors like the economy, changes in tax code, and industry growth, renewable energy businesses are in high demand. With more buyers than sellers in the market, now is the perfect time to exit.
3. Assemble a team of advisors
At National Business Search, our team of advisors has been in the business for decades. We’ve sold hundreds of businesses since our inception in 1978, and come from a background in M&A law. We are able to negotiate directly with lawyers to save you time and money, as well as speed up the process of selling your business.
4. Get a proper business valuation
Contrary to popular belief, conducting a business valuation is something you should never do on your own. There are several factors involved in generating a price that you likely haven’t considered, and chances are that you’ll undervalue your business and wind up leaving money on the table.
At NBS, our business valuations are free and accurate--guaranteeing you top dollar for your business should we decide that you’re a good fit for us. We are very selective in who we choose to work with. This is just one of the ingredients in our recipe to having over a 90% success rate in selling businesses.
5. Look for ways to improve before selling
After you’ve completed steps 1 - 4, you should be able to determine whether or not your business is in the position to sell. If it’s not, we’ll help you discover where to make improvements before putting it on the market.
These improvements may involve tweaking your processes, fixing up any cosmetic or technical issues with your physical location and machinery, creating a better customer base, or cutting back on expenses.
6. Get your financials in order
One of the first things a potential buyer will be interested in is your financials. Getting together a clear and accurate representation of all your documents (relevant real estate documents, tax returns, and balance sheets) is absolutely essential. Potential buyers need to be able to clearly visualize your projected earning potential.
At this juncture, most business owners will hire an M&A lawyer for assistance, which can be quite detrimental to the sale if you hire the wrong lawyer. But at NBS, you won’t have this problem because of our law background. We will also update your financials once a month to an experienced M&A.
Still interested in selling a renewable energy business? If you really want top dollar, you’ll partner with a business intermediary like NBS. With decades of experience helping business owners like you successfully plan and execute an exit strategy, we’ve got the market knowledge necessary to help you exit without leaving money on the table. Apply for your free business valuation today!