Winning the Marathon: The Importance of Having an Exit Plan
You need to plan now for exiting your business someday.
Do you have an exit plan for your business?
What is your plan? Are you going to sell your business and retire? Going to keep the business in the family? Kicking the can down the road for a few more years only makes the problem worse. So ... do you have a plan? Are you working toward it every day?
I know that might seem like a lot of daunting questions. I know that sometimes it’s enough of a struggle to just try to take things one day at a time.
But I’ve seen what happens to owners who never want to think more than one step ahead. I can tell you from watching that happen, you’re going to wake up one day and find it’s too late to get out of the game.
Having an exit plan is important enough in great economies. In this economy, it’s critical. Here’s what we’ve done and what we’re doing in our shop, and what we recommend to our clients.
Systemize all operations. The business value of a shop can be dramatically enhanced by solid, clear systems, policies and procedures. Make your team accountable for following these.
Measure all important numbers so they can be managed and improved. Without measurement of the vitals in your shop, you cannot manage them for improvement. Again, this is critical for your team to understand and make happen. This starts with finding and using shop management and profitability software and tools that allow you to easily measure your team, hold them accountable, and manage remotely in a few minutes each day. There’s no magic bullet that lets you skip past the “use it” step, however. A measurement tool can reveal your shop’s weaknesses, and the best will help you fix those problems, but none can do the work for you. You must feed it accurate information and take steps to correct the problems it identifies.
Move toward total remote management. By installing the two items above – along with a chain of command and clear expectations – a shop owner can move toward remote management of the business. This will also multiply the value of the business and put it into a position that will allow you to own it as an armchair investment for many years past retirement age (if you so choose).
Don’t want to move toward remote management? Then think of it as being able to spend more time working on your business instead of in it. How much less stressful will your day be when you’re not wearing any employee hats?
Build a dominating brand with higher-end customers. By dominating your market, your sales can remain stable and even grow – even in very rough economic conditions. When loans become non-existent and interest rates skyrocket, you will have the cash flow you need to survive and thrive.
Seek good consulting, tax and legal counsel. Whenever you decide to sell your business, either through a third party, to family, or to one or more employees, get good legal, tax and strategy counsel. You can set yourself up for success or failure by the advice you seek and follow.
Focus on your plan and execute! Once you have all the components of your plan identified, do not let anything get in the way of moving forward and executing your plan. This is the only way you will ever be able to retire in the manner you deserve and desire.
If you keep your eyes on what’s important – the safety and security of your family, yourself, your employees and their families – you’ll be much more likely to stay successful and exit on your schedule instead of hoping for the best.
If you haven’t thought about how to win the marathon and create an exit strategy, I encourage you to send me an email at email@example.com. I don’t have any tricks or gimmicks for planning for your future ... I can only share the same roadmap of procedures and systems we’ve taken in our shop.
No matter what, I hope you’re working toward your exit plan! Good luck!
Editor’s Note: This article is one in a series of management articles that are contributed to AutoInc. by Automotive Management Institute (AMI) instructors. AMI’s team of professional and knowledgeable instructors cover a variety of topics designed to educate and train today’s service and repair professional. To learn more about AMI, its courses – including its monthly webinars – and instructors, visit www.AMIonline.org. AMI administers the distinguished Accredited Automotive Manager Program.
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