You want to sell your collection agency? Then it is good to know what the acquisition market in the field of collection agencies looks like. In the coming years, there will be more focus on credit management software and efficient work and payment flow.
Collection agencies have had to work very hard over the last few years to meet demand. Access to the legal process has been simplified, which means that even small business owners are handing over claims more quickly.
There are many ways to value a business. A common method of expressing the value of a business is "a factor x gross annual profit." This factor is also called multiple and another designation for gross annual profit is EBITDA (Earnings Before Interest Taxes Depreciation and Amortization).
In the business services sector, which includes a collection agency, an indicative EBITDA multiple range of 4.6 to 5.5 is currently used, according to the Brookz Takeover Barometer. The average EBITDA multiple across all SME sectors is 4.90.
The valuation of a business is often the starting point for negotiations between buyer and seller. The outcome of these negotiations is the final sales price. So valuation and price are two different quantities. Besides valuation, the price is also determined by possible scarcity in the market, bargaining power of the parties, the strategic value of the business for the buyer and possible synergy effects for the buyer (cost savings, purchasing advantages).
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Do you want to buy a business or sell a business in the business services sector? With this Brookz Sector Monitor, we want to present buyers and sellers with facts, figures and an outlook that provide insight into the number of transactions, the value development of businesses and the latest trends and developments in the business services sector. Because in every buying or selling process, thorough preparation gives peace of mind, overview and structure.
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There are many startups in the market every year, so the number of businesses with one person working is very high.
In figures, the number of collection agencies in 2024 looked as follows(CBS):
With this online training from Brookz you are optimally prepared to largely sell your business yourself: 25 Powerpoint videos, a comprehensive valuation report, legal model contracts, handy templates, checklists and expert support. Plus 50% discount on listing your business on Brookz!
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A number of trends and developments will inevitably cause changes over the next few years, but also offer collection agencies many growth and acquisition opportunities:
The development of credit management software is gaining momentum. By automating tasks for business owners, the workload decreases and efficient action can be taken when the business owner cannot collect the debt himself. This method of working reduces costs and simplifies the collection process.
To cater to consumers, and increase sales, post-payment is one of the "new" payment options. One-click-payment options and cryptocurrency are also opportunities to broaden the offer. In practice, it appears that this reduces the number of payment problems and claims are paid earlier, according to ABN Amro.
Increasingly, the emphasis is on prevention rather than cure. In the debt collection world, this is about providing options that prevent payment delays as much as possible and, if they do arise, adequately resolve them as early and quickly as possible, according to trend research by Rabobank and Grant Thornton.
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