Whether you plan to open your own business or buy an existing one, the idea of an exit strategy often gets overlooked. If you are looking into franchise opportunities, make sure you ask your franchisor this important question, “What will you do to help me sell my business when I’m ready to retire or move on?” Here are professional answers, tips and advice…
All too often, eager entrepreneurs tend to overlook the bigger picture of their promising careers as business owners, foregoing the process of planning an exit strategy because they have their noses to the grindstone preparing to launch and build. Yet, the best time to think about a strategy to exit your franchise agreement is during the period of time in which you are preparing to enter it. This is precisely the time when you need to meet with your franchisor and other advisors to consider the real value of the asset you are gearing up to create.
Crafting a rewarding lifestyle, maximizing the chance for continuing profitability and cash flow are among the biggest considerations when you are making an intelligent decision about becoming a franchise owner. Still, with equal importance comes nurturing and growing the asset you are about to create AND increasing the chances that you can benefit from every last drop of that value when the time comes to close the curtain on that part of your professional career.
You are the mastermind of your own future as a franchise owner, equipped (if you selected wisely) with a partnership in your franchisor that allows you to look at the entire landscape of your career and make as strong a plan to exit as is your plan to begin. This is vital to a logical plan for success as well as peace of mind. The greatest accomplishments come from proper planning and sticking to the game plan. For instance, the New York Islanders hockey team won four consecutive NHL Championships and 19 consecutive playoff series victories, becoming one of the greatest dynasties in hockey history. They did this because the coaches and general manager created a plan that included strategic trades and drafts based on the climate of the game not just for the current year, but many seasons ahead. From there, the team stuck to a tight game plan, executed according to a precise system, and was better able to handle “bad bounces” of the puck during their years of victory.
In the same way, creating and sticking to a tight, well-executed business plan with the input of seasoned advisors naturally increased the chances that you can build and nurture profitability of your growing empire as well as maximize the chance to exit with ease on your own terms.
“Planning is bringing the future into the present so that you can do something about it now.” Alan Lakein, writer
A franchisor worthy of your investment should want to provide you with everything you need to make a complete plan for your career as one of their franchisees, including vital information about asset growth and the many factors that may affect it. They want to align with you so that you can contribute to the value of their brand with the best plan for your situation and, by doing so, your success on entry and exit augments the value of their brand which heightens value for all of its franchisees. Significant thought is necessary at the time you start your business so that the most effective exit strategy can be anticipated. If your plan is to leave your business to be run by your successors, perhaps your children, the value of the asset you are transferring to them is critical, not just annual income. Naturally, the timing of your exit carries its own variables and significance and not all of those variables can be controlled. They are the “bad bounces” we hope to handle with the help of our allies and with a solid plan to fall back upon.
Steve Edman, owner of Minuteman Press, in Bellaire, Houston, TX, sees his exit plan as something that allows him to stay involved in the business that he has grown passionate about, while looking out for his financial future. Steve shares, “For me, my center is my NEW 401K. I opened up 11 years ago after a long business career in the Beer Business. My only regret is I did not find Minuteman Press 20 years ago! My goal, once I found the right employees in their respective roles, was to hand over the day to day business operations to them. I feel with their tenure with me that they will have earned that right. I will always be involved with the business in some capacity and still have a lot of fun. If needed, I would reach out to my local Minuteman Press International support staff and ask for their support and guidance to sell and retire, again.”
“As for the future, your task is not to foresee it, but to enable it.” Antoine de Saint Exupery
Eventually, even the greatest people in their fields exit their careers, and you are no exception. The important point is that you are well aware of the realistic lifecycle of your business ownership and plan accordingly. The best time to plan your exit strategy is while you are embarking on your quest to storm into your industry of choice with great force, intent on developing and expanding your venture. One day, you may wish to ensure that the fruits of your labor come back to benefit you or your family in the form of a generous check OR the opportunity to see that a new generation takes your place and continues the legacy you created for them.
An important point to note is that most franchise systems require the franchisees to sell their businesses on their own or go out and hire a broker to do it for them – again, on their own. It is only the most select franchisors that stick with you all the way through from start-up to the realization of your exit plan. Minuteman Press International is one such select franchisor and their franchisees can turn to the officers of the corporation throughout their franchise ownership for essential help, including when it comes time to sell. You will be giving you future self a gift by limiting your franchise opportunity investigation to those backed by long-term support, including assistance during the time at which you choose to bow out and move on.
Bob Heimbuch, Regional Vice-President for Minuteman Press International in Maryland/Virginia, acknowledges that some plans are not laid out at the onset of business ownership, but knows that a proper strategy can be put into place to get on the right course. He addresses those who wish to sell their businesses, saying, “Franchisees (who have not done so earlier), should consider their exit strategy three to five years prior to putting their business up for sale. Profitability is the most important factor in how fast a business will sell and how much money it will sell for.”
Bob Heimbuch offers 3 tips to prepare your franchise for an ideal sale:
1. Make sure your figures are up to date: As a franchisee looking to sell your business, your attention should be placed on making sure that your profit and loss statements are up to date.
2. Make sure your business is clean and organized: The second most important factor is the overall appearance and organization of your business. First impressions are extremely important in decision making. Clean up your business just like you would when selling your home or automobile.
3. If possible, avoid financing when close to exiting: Also, I think it’s important to try to avoid financing of any new equipment that the buyer would be required to assume with the purchase of the business. The less pieces of the puzzle for the buyer, the easier the decision and the smoother the transaction.”
“A good plan today is better than a perfect plan tomorrow.” George S. Patton
Your franchise is your investment; some may say it is “your baby” as you have put your money and your life into it, nurturing its growth. You have taken on a particular brand with pride while combining your hard work with its system in the quest for a solid annual profit (as well as something a bit more over time). Your exit will happen and it will likely be emotional. However, you can help to make sure the nature of those emotions are satisfying based on the plan you put into play from the start, no matter how you exit the great stage of business.
Learn more about Minuteman Press franchise opportunities as www.minutemanpressfranchise.com.