This is the fifth and final post in a series on creating a business plan for a sports facility. In past weeks, we discussed creating a sports facility business objective, creating a sports facility marketing plan, creating a sports facility operations plan and a sports facility finance plan.
It’s always more fun to create your new business plan than it is to think about how you’re eventually going to STOP running it. But even if your sports facility stays open forever, you won’t be around to see it. So, your business plan should definitely conclude with a paragraph that describes your personal exit strategy.
If you’re going to show this business plan to potential investors or partners, you’ll want to use this section to emphasize that you’ve planned for all scenarios to protect the business and their investment. (If this business plan is more for your own planning use, you should still add this section. It will help guide your leadership through the years.)
Before we talk about what to write in the “Exit Strategy” part of your plan, let’s talk about your exit options.
1. Sell Your Share in the Business to Your Partners
If you open your facility with other financial partners, any one partner should be able to personally exit the business by selling their portion of ownership to their partners. Your partnership agreement should include the details of how this should happen. Then, the agreement should definitely be reviewed by a lawyer.
2. Best Option: Sell the Business to a New Owner or Owners
The process of selling your business can be expensive and complicated. After all, t’s not simple to put a value on a business, and there are plenty of legal and accounting fees. However, it’s usually the best exit strategy for sports facilities. It usually makes you the most money.
Here are a few common buyers for sports facilities:
- Related businesses. Look for companies that could benefit from expanding into your market. For example, in the past, DNA Sports Center was looking to acquire an apparel company so that we could sell baseball uniforms, Dri-fit apparel and more apparel items directly to our customers. Similarly, your competitors might want to expand into your location someday.
- Current employees. It’s common for facility staff to be interested in purchasing the sports facility where they work. Also, they can be good buyers because they already understand the business. (Side note: Owners who want to sell to employees often use a “leverage buyout model” that allows the buyers to payments over time rather than upfront. Unfortunately, this often results in plenty of headaches if the new owners can no longer make payments. Get as much money upfront as possible to avoid losing losses and/or being sucked back into the business you tried to exit.)
- New sports facility owners. If you list your business for sale, you might get inquiries from new potential sports facility owners who are looking for space and equipment and might want to buy your business outright.
3. Close the Business and Sell all Your Stuff
If you can’t find a buyer, you can simply close the business and sell your assets (building, equipment, furniture, etc.) to whomever will give you the best deal. Don’t list this option explicitly on your business plan, except to note any resale value benefits of your equipment and infrastructure.
Add Your Exit Strategy to Your Business Plan
Now that you’re familiar with your options, you can summarize your exit strategy in a short paragraph to conclude your business plan.
Here’s an example of what it could look like:
All of DNA Sports Center’s owners will agree to a detailed, legally approved document that specifies the terms of any individual’s potential exit from the business.
By consistently investing marketing dollars in DNA Sports Center’s brand and image, focusing intensely on reaching profitability, and by investing in and maintaining quality pitching machines and fitness equipment, we’ll make sure that our facility is attractive to any potential buyers from the sports performance industries.
That’s it — we’ve come to the end of the business plan series. I hope you’ve found some useful information. If you’d like to talk more, please contact me. If you’ve finished your plan and think it’s viable, it’s time to look for a facility location.