It’s a peculiar time in America with “gray hairs” and “Millennials” vying for positions in the marketplace. Are you a mature company looking to sell and retire soon? Or are you a new company looking to make your “mark” on the American marketplace? The Baby Boomers want “out” and youth wants “in” – the problem is the oldsters want big money and their kids don’t have it. Hell, many Millennials are still trying to pay off their student loans while living at home with the parents. Looks like a classic Catch-22.
Whether you are a dealer celebrating your 40th year in business or a cottage-industry aftermarket manufacturer doing the same, the problem is the same: Do you sell it off to family, employees or an outside investor? Has the industry rebounded enough for you to get out without losing your shirt? Will the financial folks ease the restrictions enough for the youth to get into the game? Exit or entry, everyone is still asking the same question: Where do we go from here?
It is a tough situation because the buying market is pretty darn small in the powersports arena. Fortunately some of that is changing for our little ol’ industry with venture capital firms sniffing around for retail and manufacturing opportunities. Consolidators and “category killers” are also doing “due diligence” research on powersports opportunities, especially after hearing of the recent merger of Tucker Rocky/MAG and Western Power Sports/Marshall Distributing. In any event, what’s your five year exit plan? Do you even have a five year plan?
When you clean up or detail your car or detail or “stage” your house before selling it, you similarly need to “detail” your business. Clean it, groom it, hone it, focus it, sharpen it… and then sell it! Done properly, that process can take three-to-five years, so start planning immediately.
However, it’s tough to be honest with yourself after all these years. Can you tell it like it is about your business? No two businesses are alike, so you might consider calling in an expert assessor, just like you would for your house. We have taken some of the guesswork out of it with the Vroom Network “Brand Strength Diagnostic” (vroomnetwork.com/ brandtest). Even if you are not planning on selling out, at least go through the process. If you want a more personal review, please send it to me: [email protected].
To have built your mature business you had to be rigid. To reposition it for sale, you will need to be more open minded. If on the other hand you are a new (start-up) business, you can learn from others’ mistakes and skip those steps. Pioneers never have it easy because they risk the most perilous pathways FIRST… while the next generation can leapfrog those hazards by learning from their predecessors.
It’s never too soon to decide your exit strategy. Investors in new businesses want to know their exit strategy even before they start. Take the hosts on Shark Tank for example. If you want their money, you have to play their game! Whether you are getting involved with the industry or getting out… get more involved working ON your business and less IN it. The view from a higher altitude will make refinements more easily justified when you have a specific roadmap. Exit or entry? Either course requires a clear map and a commitment to making your dream happen.
Want To Sell Your Business?
Either locally or nationally, your business is a “brand.” You need to maximize your brand’s value just like you would for a used motorcycle or house before you post any ads. Before you find a broker to help you sell your business, you need to be able to answer these questions: • Can you succinctly state your top 5 unique brand attributes? • Can you quantify your brand’s SEO, relevance, social media and mobile device presence? • Have you developed an honest roadmap for where you are going in the next five years? • Can you come up with a competitive value/price for your current assets?
Want To Start A Business?
Start by building a three-to-five year business plan…or find someone to do that for you. Before you can build your business, you need to be able to answer these questions: • What is your IP (Intellectual Property) status? Are you truly unique and protected? • Is your business plan detailed, solid and complete? • How detailed is your “go-to-market strategy?” Or is it just a pipe dream? • Are you well-funded enough to get a foothold in the market? If you can’t answer all of the questions, you might want to consider living at home a little while longer and paying those student loans down rather than getting into the powersports game!