What’s Your Exit Strategy?
It’s a question many shop operators would rather not think about: What is your exit strategy? What happens to your business when you choose to retire or are physically unable to run it? Unless you’ve unlocked the key to eternal life, that day is inevitable, which makes planning for it crucial.
This topic was discussed at length during a workshop at the FenderBender Management Conference led by John Walcher of Veritas Advisors Inc. Walcher, along with a couple of shop operators, weighs in on the issue again in “An Industry in Transition.”
“You need a plan, you need to execute that plan—but it all has to be built around what will work best for you,” he says.
The feature shows two different approaches to transition—an MSO sold to a consolidator and a husband-and-wife team that transitioned ownership to new operators. In both instances, the former shop owners had a vision for the future of their businesses and a plan to execute them. Those visions were also realistic given the status of the operations and the markets in which they operated.
As you’ll see in the article, there’s a lot that needs to be evaluated and addressed to make any transition successful. For instance, if you’re a small MSO reliant on DRP work in an increasingly consolidated market, selling to a consolidator that best fits your culture and business model might be a better option for the longterm future than transitioning the shop with the intention of remaining independent and DRP-reliant. A niche independent shop with a strong community following, on the other hand, would probably be better suited to transition to new ownership under the same model rather than trying to sell to a larger repair network.
Assess your business and your market, think about what you want and what is actually possible. Having a game plan in place will ultimately allow you to run your business more effectively, and toward your future goals.