selling your law firm starts now
law firm Strategies
Many law firm owners see their firm as a retirement plan. If that’s the case for you then you need to start thinking now about how to get the most when selling your firm.
These are ideas and strategies that need to be in place long before you’re ready to sell. A buyer will want to see at least the last 3 years of financials.
Here's a few metrics a buyer will pay attention to when buying a law firm.
#1 Cash to Owners
A buyer will want to know the cash flow to owners. Does the firm have the profits and cash to pay the owners on an ongoing basis? The higher the better.
In a law firm, the owner should see 50% of profits hit their bank account.
So if you've been hoarding cash, now is the time to start paying yourself more.
There are several tactics you can use to hit this target:
Raise Firm Rates
Get Better at Pricing New Clients
Have Processes in Place for Efficiency
Hire and Manage Great Staff
#2 Owners Time Spent in the firm
Buyers typically are not looking to buy a job, they're looking for an investment. Time spent in the firm shows whether the firm can run without you or not. Each year you should try and reduce the time spent working on client matters.
The key is having processes and systems in place so the law firm can run without you. Hello Vacations!
You'll want to have an Operations Manual that teaches staff exactly how to do their work, communicate with clients, and operate the way you want. (If you don't have this in place, we seriously need to talk! Click here.)
#3 Quality of Staff
Buyers aren't looking to buy your business, fire your staff, and start all over. They want a turn-key operation. Having "A" team members can increase your sales price.
Now is the time to invest in your staff. If they are lacking in areas spend the money on getting more technical training. If they need to be better leaders, spend time coaching them. Don't assume these things will happen on their own!
#4 A Winning Culture
Culture can be the driver of growth, but it can also be the driver of death.
Do you have high employee turnover? If yes, there could be a couple of things going on. Either you're a crappy interviewer or you have a crappy culture. The good news is both are easy to fix!
To have a great culture you need to have Core Values in place that state what you, your business, and your team members believe in. If you all have the same values you're more likely to have a winning team and winning culture. These Values will not only help you hire team members, they'll also help you hire or fire clients. Use them as a guiding light.
It's Not Too Late
It's not too late to implement changes in your business. Now is the best time as any to start building your high-quality service business.
If you have no idea where to start I'd love to help you! Click here for a consultation. We'll discuss your present situation and how Aligned CPA can help you reach your goals.
I help service based businesses GROW by providing coaching and growth planning services that will take their business to the next level.
I promise you, working with a CPA can be much more exciting than crunching numbers and reviewing last year’s taxes. I look at the day-to-day of your business and help you find ways to perform better, grow bigger and generate revenue with greater ease.