Do you have an exit strategy for your wedding business? Having recently sold my own business, this is something I’ve had to think about a lot recently.
I can hear many of you shouting “I’ve only just set up, I’m not thinking about shutting down”. But, in fact, you don’t need one exit strategy – you need two!
We all know the importance of planning for running a wedding business and you probably have a good idea about the next year or two. But have you thought about 5, 10 or more years down the line? Do you expect to still be running your business then? Will you want to? Will you still be in love with what you do?
And what happens with your business if life throws a firework into your plans? If you were unable to carry on with your business what would you do?
The planned exit
Every year when you revisit your business plan, take the chance to think 5 or more years ahead.
Where do you ultimately want to take your business? Will you want to continue until you retire? Would you like to build it up and hand over to a manager while you concentrate on other projects? Or would you like to do something else? Knowing your ultimate goal will help you make better decisions while running your business. Taking time to prepare your business for sale or closure will maximise the return on all your hard work.
The unplanned exit
…. you or someone close to you fell ill
…. your partner was offered their dream job abroad
…. you fall pregnant – with triplets!
We can’t plan for everything, but it is worth thinking about what to do if you suddenly need to change direction.
In my own case it was family illness that tipped the balance. I was living and running my business in Yorkshire while my husband worked in Manchester. When my mother fell ill in Scotland something had to give.
Although I had staff and the business was profitable, it wasn’t earning enough to allow me to employ a full time manager. I had been thinking about selling in a year or 2 so I brought my plans forward.
For most wedding businesses, the 3 main options will be:
1. Sell as a going concern
This is likely to provide the best return, but it does take time. You need to have tangible assets, a profitable trading history and be able to convince a buyer that they will get a better return buying your business than if they set up from scratch.
It took 5 months to sell my business and it can take much longer.
2. Shut the business but sell the assets (client list, stock, website etc)
You may not get much for the assets individually but if you need to stop trading quickly then this is the most likely option. You can then dispose of the assets in your own time. Try ebay, emailing your competitors and letting as many people as possible know what is available.
3. Shut down
Set a date on which you will close and wind everything down. Have a sale for remaining stock and stop taking new bookings. You can set the timescale to suit yourself and your circumstances although this type of orderly shut down will generally need planning months in advance.
Finally, make sure you understand the legal obligations of your business before you exit – this will depend on your country and trading status.
PS: My mother is much better, but I know that, if needed, I can drop everything and head up to Scotland without worrying about the business. And I’m currently working on a new venture which will give me more flexibility in the future.