There comes a time when you as an owner will exit your restoration business. This could be a result of a strategic plan as retirement approaches, a son or daughter taking over, health issues, or possibly a liquidation event.
The best exit (and most profitable) often comes in the form of selling the business. I am often asked, “When is the best time to exit?” My aim is to shed a bit of light on a few variables that may drive your upcoming decisions.
1. Ready to Retire. Let’s mention the obvious first. Many owners are north of 60-65 years old and able to retire financially. If you’re in that category it may be simple- are there other things you’d rather be doing?
2. Health Issues. About twice a year I receive a call from an owner that goes something like this: “We met 3 years ago at a show and swapped a few emails since. As you know, haven’t taken any steps to sell. Went into the hospital 2 days ago with chest pains… doc says I can’t go back to work. How quickly can you get me outta here?” Or worse, “My cancer is back. I’m shutting it down in 3-4 months if you can’t get it sold by then.”
This only happens to other people, right? With no exit planning in place it can be devastating for owners, their families and valued employees.
3. Changing Industry. For 10+ years I’ve served the restoration industry. With the proliferation of TPA’s and ‘program work’, any industry veteran will tell you it’s not the same industry as it was 15-20 years ago. Still profitable? Yes. Frustrating? Absolutely.
With time comes change, including both markets and industries. At some point every owner makes a conscious effort to fight the good fight. Others conclude it seems foreign and they’re tired of the grind. Neither is right or wrong, as long as it works for you.
4. Growth Outpaces Skillset. Typically, ‘doers’ start their own companies- plumbers start plumbing companies, chefs start restaurants, PM’s and Estimators start restoration companies. For many, ‘doing’ is the entry-level skillset required to own a successful small business. But it’s been proven, the skillset to start a business is monumentally different than the skillset to manage and grow one.
Without this skillset evolution, frustration and burnout is typical. Thank goodness for industry experts and consultants helping cultivate ‘doers’ into managers and eventually leaders. Their guidance is often critical.
5. Opportunity Knocks. Exit plans should change and evolve as your circumstances do. A simple yet solid plan contains answers surrounding a sale, both now or years down the road. When the right opportunity comes-a-knockin’, it may catch you by surprise. That doesn’t mean you can’t be prepared. As one of my clients recently said, “They must’ve thought we were the pretty girl at the dance.”
By getting a few questions answered most any business owner can prepare. (Not to mention, relieve some stress.) With a little effort, many companies can be the ‘pretty girl at the dance’.