Selling a Consulting Services Business

A consulting firm is usually priced as a multiple of the cash the owner can take out each year, and that multiple moves with what a buyer can rely on. Buyers pay more when revenue repeats without the founder and when project margins hold up engagement by engagement. If utilization is stable, contracts are transferable, and fixed-fee work is controlled, terms usually improve. Rejigg’s free valuation calculator gives a quick estimate using real transaction multiples and owner add-backs.

Add-backs are costs shown in your books that a buyer likely won’t keep paying, like one-time legal bills, owner personal travel, or non-recurring software. Consulting has a common trap: owners call unpaid founder delivery time an “add-back,” but buyers often treat that as a real labor cost they’ll need to replace. Keep an add-back schedule with receipts and clear notes in your data room. Rejigg’s QuickBooks integration helps pull financials into a buyer-ready format.

No. Brokers usually charge 5–10% of the sale price for a process you can run yourself with the right buyer access and tools. Rejigg gives you pre-vetted buyers, digital NDAs, a secure data room, direct messaging, and side-by-side offer comparison, so you can sell broker-free and stay in control. Sellers pay nothing on Rejigg. Buyers pay.

Most consulting firm sales take a few months to a year. The timeline depends on how quickly you can produce clean financials, how many client contracts need consent for a change in ownership, and how tied revenue is to the founder’s relationships. Deals often slow down when buyers can’t verify pipeline or when retention packages for key consultants are still being negotiated. Rejigg keeps buyer conversations, diligence steps, and document sharing in one place.

Often yes, if the firm shows steady cash flow, clean financial reporting, and a handoff plan a lender believes will protect revenue. It can get harder when revenue is mostly one-off projects or when the founder personally owns the client relationships because lenders worry about churn after closing. Before you agree to price and terms, run the numbers with Rejigg’s SBA loan calculator so both sides understand realistic payments.

Buyers usually ask for three years of financials, a client and project summary, your key MSAs and SOWs, subcontractor agreements, an employee list with roles and compensation, and a simple backlog and pipeline view. If you claim proprietary methodology or tools, expect requests for proof of ownership and examples of use in client work. A permissioned data room helps you share details in stages. Rejigg includes a built-in secure data room as part of the selling workflow.

A letter of intent is the buyer’s written outline of the deal before they invest heavily in due diligence. In consulting, it usually covers price, how much cash is paid at closing, any seller financing, any earnout tied to future performance, and what transition support the seller will provide to keep clients stable. Treat it like a roadmap for the next 60–90 days of work. Rejigg’s offer comparison dashboard lets you review letters of intent side-by-side.

An earnout is money you receive later if the firm hits agreed targets, often over 6–24 months. In consulting, earnouts are common when the buyer worries revenue drops after the founder steps back or when pipeline depends on relationships that are hard to prove. Earnouts can be reasonable, but only when the targets are clear and the buyer can’t change staffing, pricing, or scope in ways that make the target unreachable. Track earnout terms carefully in your deal tools.

Buyers usually ask for a non-compete so the seller doesn’t start a similar firm and pull clients back, and a non-solicit to reduce the risk of employee and client poaching. In consulting, the practical issue is writing terms that match how work is actually sold since relationships are personal and clients may try to follow people. Aim for clear definitions, reasonable geography, and a time period you can live with. Keep signed agreements and key employment docs in a controlled data room during diligence.

A working capital adjustment is a closing true-up based on whether the business is handed over with a normal level of short-term operating items like unpaid invoices you’re owed and bills you still need to pay. Consulting firms can swing a lot because enterprise clients pay slowly and subcontractor invoices hit in chunks. Buyers want to avoid paying the price and then funding last month’s payroll. Clear billing cadence and collections history help prevent late surprises.

Buyers want to understand what work has been delivered but not billed yet and what has been billed but not collected. Unbilled time can be real value when it is clearly billable under the SOW, and you have a history of collecting it without disputes. It can also signal scope creep or weak governance when it’s a vague “we’ll bill it later” bucket. A schedule of unbilled items by client, tied to milestones and contract terms, keeps diligence calmer.

Many consulting deals are asset sales because the buyer can choose what they take on and limit certain liabilities. Stock sales show up when contract continuity matters, especially if your MSAs, vendor registrations, or government client approvals are hard to re-paper. The right answer depends on your contracts, taxes, and risk tolerance, so bring in a qualified advisor early. Rejigg can support either structure because the platform focuses on buyer access, diligence organization, and offer tracking.

Confidentiality usually comes down to staging: share a high-level overview first, then share client names, contracts, and employee details only when a buyer is serious. Most sellers wait until a buyer is vetted and has signed an NDA before they reveal anything that could travel through the market. Rejigg supports this directly with pre-vetted buyers, digital NDAs, and a data room where you can control access by buyer and by stage. That reduces the risk of forwarded files and rumors.

Most buyers expect a defined transition focused on transferring client trust and keeping delivery stable. That often means joint client calls, executive sponsor introductions, and a period where you stay available for escalation. The length depends on how founder-led relationships are and how much delivery depends on senior partners. Put the transition scope in writing early so it does not turn into an open-ended commitment. Rejigg’s transition planning guide helps you structure it.

Tax outcomes depend on your entity type, whether the deal is an asset sale or stock sale, and how the purchase price gets allocated. Consulting firms often have most of their value in goodwill, but the allocation still matters, and buyers may push for allocations that help them while raising your tax bill. Get a tax professional involved before the letter of intent is finalized since that is where structure often gets locked in. Keep draft allocations and support in your diligence folder for clean review.

Buyers usually verify SOW-based revenue by tying signed MSAs and SOWs to invoices, collections, and evidence the work was delivered. They also look for patterns that predict repeatability, like phase-two follow-ons, retainer renewals, and documented change orders instead of surprise write-offs. From real diligence calls, the fastest deals are the ones with a clean package of contracts plus billing history, not verbal explanations. Rejigg’s QuickBooks integration and data room help you assemble that package without email chaos.

Before you list, clean up financials and add-backs, then organize the proof buyers will ask for: project profitability, utilization, backlog, and your top MSAs and SOWs. Most of the value work in consulting is reducing founder dependence, so document who owns each account relationship and who can run delivery without you. Put key team and subcontractor paperwork in order so diligence does not stall. Rejigg’s prepare-to-sell guide walks through the steps, and the platform gives you a secure place to host materials.