The biggest segment in the software industry belongs to CRM software. With its steadily increasing adoption rate comes the expected growth of the sector, which is expected to reach $207.84B by the year 2032. When investors are all eyes on this kind of momentum, there is no better time than now to sell the CRM business.
Preparing Your CRM Business for Sale
Exiting your CRM business takes years of preparation. You have to ensure that your books are clean and accurate.
The value of a crm platform is also dependent on various metrics, including major ones like annual recurring revenue and churn rate. Efficiency in operations also raises the value of your company, so it’s necessary to track aspects like the following:
Lead scoring
Customer data
Sales pipeline
Customer service
Sales process
The effectiveness of the sales and marketing team
Customer experience
From the moment a user interacts with the platform, through its interactions with the sales teams, and until the post-purchase interactions
The main takeaway here is that there will be a lot of intangible assets taken into account when valuing a customer relationship management software. So part of your preparation will be the documentation and organization of business assets. Make your offer attractive by creating a compelling business narrative.
CRM Business Valuation
Any CRM business owner needs to understand that valuation is not an undertaking that they should perform on their own. There are valuation services for CRM firms that are suitable for the amount of revenue the company earns. Meaning, a number of business brokers have affordable options, while others deliver comprehensive reports for larger enterprises.
Any advice on how to improve your valuation pre-sale will mention the key metrics buyers look at and the importance of understanding CRM business valuation methodologies.
What are the metrics you’ll present during the due diligence phase? Here are some of the most important ones:
Churn Rate. It measures how many subscribers discontinue the service, calculated on a monthly or yearly basis.
Annual Recurring Revenue (ARR) and Monthly Recurring Revenue (MRR). Certain business buyers favor MRR over ARR, as it more accurately forecasts future earnings due to fluctuating markets, competition, and regulations. Conversely, others value ARR for its comprehensive revenue overview.
Customer acquisition costs (CAC). It represents the expenses incurred in sales and marketing to gain a new customer.
Lifetime value. It indicates the average revenue anticipated from a customer over their relationship with the business.
Common valuation methods used when you sell CRM software business:
EBITDA, or Earnings Before Interest, Taxes, Depreciation, and Amortization, is a valuation metric that looks at a CRM company’s profit and cash flow, ideal for businesses with high earnings, especially those above $5 million ARR.
Seller Discretionary Earnings (SDE) represents a CRM software business’s earning potential, calculated as revenue minus cost of goods sold and operating expenses, plus owner compensation. Ideal for sole-owner businesses or those under $5 million ARR.
You can make improvements where necessary when you are aware of these metrics and valuation methods. Moreover, once those improvements are applied, the company’s value increases.
CRM Startup Exit Strategy
The end goal is to make an exit with your company funding your life post-exit. But did you know that there are plenty of ways to do a CRM business exit plan? Here are some of the typical ways:
Management buyout. The management will purchase the company and take over its ownership.
Sell to a private equity firm. These firms buy companies with high growth potential. Their goal is to make it more profitable.
Initial public offering. Turn a private company into a publicly traded one and sell stocks.
CRM mergers and acquisitions. Sell the company to a competitor or a strategic investor.
Generational handover. Pass the ownership to the next generation.
No matter which strategy to exit CRM technology business you choose, you need to plan what you can do right now for your exit and how you’ll go about through phases of your exit strategy. Let’s explore the examples of actions related to long-term vs. short-term exit planning.
Short term: Get a valuation and ask your business broker which areas need improvement.
Short term: Address areas of improvement to increase the value of revenue-generating aspects of your CRM.
Long term: Plan how to address the weaknesses of your business, so that you’ll know how to answer questions from the buyer.
Long term: Determine which payment structure is ideal for your life post-exit.
Long term: Write how to position your CRM business in the market and work toward it.
Finding the Right Partners for Your Sale
Unless you’ve previously sold a company, there’s just no way around hiring a business broker when you have plans to sell CRM business online.
You need to start internally before you find CRM company broker. In other words, you first take a look at the technical complexity of your business. If your platform is highly specialized, you might find value in working with brokers who have strong technical expertise, such as Website Closers who specialize in internet businesses, such as SaaS companies. Additionally, consider your business’s current stage and size as a key factor.
When building your exit team, consider your timeline and how much you want to be involved. CRM acquisition services with end-to-end support may take longer but handle most details, while online marketplaces allow faster listings but require you to stay actively engaged.
Think about your ideal buyer as well. If you’re targeting strategic buyers in the CRM space, niche brokers with deep industry networks could be worth their premium. For deals focused on financial returns, platforms with broad exposure might spark stronger bidding competition.
Find out if they can help you achieve your goals by speaking to the firm’s CRM business sales consultant. Initial consultations are generally free and come with no obligation.
The Sale Process Explained
Step-by-step overview of the CRM company sale process:
After obtaining the valuation and settling on an asking price, discuss what types of buyers you prefer for your CRM company. Usually, the business brokers already have a pool of buyers who might be interested in running your company. They will vet buyers who have the resources and qualifications. You also decide your level of involvement when dealing with potential buyers. If you want to focus on the other aspects of your CRM system and what you’ll do for the exit, the business broker will take charge.
For those who want to be involved in the negotiation process, have your broker run you through due diligence preparation and management.
Once you’ve accepted an offer, the due diligence process commences. The buyer will look at your financials and ask questions about the operations, management, legal status, and intellectual property.
Negotiations also take place in the due diligence phase. The buyer, based on their findings, will try to lower the sales price. Your broker will be in charge of negotiating for a fair price. The payment structure will also be decided.
After sealing the deal, the transition period starts. The arrangement will depend on what you have agreed on with the buyer. Brokers generally recommend staying for a year for the best results financially.
Options for Selling Enterprise CRM Provider Businesses
Industry statistics shared by BizBuySell reveal that most business buyers target small enterprises. But you may be wondering, “Who are these potential buyers?” We’ll go over the most common kinds of buyers in this section.
Strategic vs. financial buyers for enterprise-focused CRM solutions.
Strategic buyers, often industry players, seek to acquire and integrate your business into their operations to boost their core offerings and long-term profitability, valuing synergy with their existing framework.
In contrast, financial buyers—such as private equity firms, venture capital groups, hedge funds, or high-net-worth individuals—focus on maximizing returns on investment, viewing your CRM company as a tool for capital growth and prioritizing metrics like revenue and ROI potential.
Seeing these distinct motivations can help you plan for post-sale integration considerations and managing customer relationships during transition. Strategic buyers are more likely to need post-deal support when acquiring an enterprise-focused CRM solution. They seek to acquire and integrate your business to enhance their operations, valuing synergy and how enterprise contracts and their impact on sale value strengthen long-term profitability through stable, high-value revenue streams.
Financial buyers, focused primarily on ROI and capital growth, typically prioritize financial performance over operational integration and are less likely to seek extensive post-deal support, unless it directly impacts profitability. They’ll review enterprise contracts and their impact on sale value, as their primary focus is on financial metrics like revenue predictability and ROI potential, which these contracts directly influence.
Individual Buyers
Entrepreneurs are eager to take the helm of their own enterprise.
Many are seasoned professionals, stepping into business ownership for the first time after years of strategic deliberation. When you sell your CRM software company, you can trust their ability to manage operations effectively due to their expertise.
Don’t underestimate them as newcomers; most individual buyers bring a wealth of corporate management experience, giving them the skills to handle the complexities of running an enterprise CRM provider.
Alternative Exit Options
While it’s highly recommended that you partner with business brokers, you can actually sell CRM business online on your own. However, certain areas of the sales process should be handled by brokers, appraisers, or lawyers when necessary. These are some cases:
If you need assistance with partial exits and strategic investments, you might find it beneficial to hire a brokerage firm for advisory services specifically to address these goals.
You want a broader scope of potential buyers when you sell CRM software business, so you ask a number of firms to list your company for sale.
The good news is that some brokers deliver unbundled services, especially if you already have buyers in mind.
Conclusion
Selling CRM software company is a complicated process considering that you have to factor in the valuation, the partner you’ll work with, the kind of buyer you’ll deal with, and many more. Through the assistance of a business broker, you can achieve a smoother exit.
At Website Closers, we are the experts on how to sell CRM firm. Look no further and call our broker to see how we can help you land the best deal.
