Many car wash entrepreneurs miss a crucial part of their business planning – determining an exit strategy. Exit plans are sometimes intentionally left out because they are associated with failure or giving up. To exit your car wash business doesn’t only mean to cease operation or give up ownership. It also means transitioning to a next major phase of the business – growth, an upgrade, an expansion, or a revamp of the existing business. There will be critical changes to your role as the lead entrepreneur as well as your investors, business partners, and successors. It clearly defines the goals of your business and presents unlimited options for its future direction.
There are many options that you can take in exiting your car wash business – transfer ownership within your family, selling to a third party, entering a partnership or merger with another company, refinancing, etc. But how would you know when to take action? There is no universal timing for exits among car wash business. Each enterprise is unique along with the people who run it and the circumstances that each business go through. However, there are factors that you need to look out for to determine what exit plan to employ and when to execute it.
It wouldn’t hurt to do a little soul-searching before plunging into handing over your business. Do you have the right mindset and attitude towards the exit? Are you clear on your reasons for selling or moving forward? You will have to explain to your prospective buyers/investors your motivation for selling. Putting your business out there to sell, placing it under the buyer’s scrutiny, can be a long grueling journey and standing by your reasons will help keep you on track.
Always go back to your personal goals for your car wash business. Evaluate how your business is fairing with your definition of success.
It is important to assess how well your car wash business is doing. You should be able to provide a comprehensive report to your potential buyers or investors on all information that they will want to look at. You should also ensure that you have your management team intact. Keeping your existing team will ensure efficient mentoring of the new car wash managers.
Tracking where your car wash business is currently situated in its business cycle is crucial to ascertain the feasibility of a sale or transfer of ownership. You will be able to sell your car wash at a higher price when the car wash industry is trending up. Expect that the exit process may take a long time to be finalized, especially for more elaborate plans. It could take months or even years before a complete turn-over is accomplished. You may want to measure this timeline against your personal goals such as retirement.
How is the current economy affecting the valuation of your car wash business? Be on the look-out for market conditions that trigger an exit. The more successful businesses are those who are able to prepare and anticipate such conditions and are able to position themselves strategically when these events take place. As an entrepreneur, you should be tracking trends in car wash products, technology, and car wash systems and determine whether you and your business will be able to keep up. Keep in mind that even though it might be wise to wait for your car wash’s value to pick up before selling or proceeding with the transfer of ownership, it is not always the case. Some buyers are in search of under-performing businesses to improve on.
Once an announcement to sell has been made, many potential buyers will want to check your car wash out. You will have to sort through which of them are really interested buyers and which are just curious neighbors or your competition checking your business out. Take advantage of the supply and demand trends in car wash sales. You’ll have more control when there are more buyers than businesses up for sale.
A decision as big as exiting a car wash business needs to have a lot of conditions and factors weighed out. More often than not, it also requires a certain level of research to be able to carefully study every element and their implications. It is wise to admit when you have a lack of expertise over a certain transaction (e.g. sales, valuing, real estate) and let professionals sort things out for you. DetailXperts can help you decide on the right time to exit your business, and the possible strategies you can take that includes converting it into a franchise with an established business model.