Wedding business Exit Strategies

A long while back, I was a Business analyst for a Business Brokerage. In my role, I would look at businesses which were looking to sell their business so we could put an accurate appraisal on that business. In putting an appraisal on the business, one of the first questions I would ask would be “why are you selling your business?”
In responding to the above question, here’s a breakdown of how the business owner would typically answer.
1) I’m burned out (far and wide the #1 answer)
2) I was going to leave the business to my kids, but they don’t want it (and neither did they)
3) Health reasons (they or their spouse could not keep up with the day to day because of infirmities or simply they got older)
In 95% of the businesses that I worked with, if they had more business they would continue with that business. Which brings us back to getting more business (my favorite subject  ). In getting more business, If your marketing isn’t working. Neither are you. More business will solve a lot of problems. That being said, if you strategically form your business to be able to pull yourself out of the mix later on, you will have a business that is not only worth selling, but more so is worth keeping. (it becomes like a vending machine where you stop in once in a while, fill it up, take away the money and go play a round of golf )
When I speak about strategically aligning your business with what you want, that means taking you out of the business. One of the biggest issues I’ve seen (and this is going to hurt a lot of people’s feelings) is that they name the business after themselves. In a long-term vision, ( unless you’re Walt Disney) if you build your brand up as such (John Doe Wedding Business), this is not a good strategy.
In the business world most of your business is valued based on goodwill (which is the past/repetition business you’ve done and the name that you built in that business) and F, F, and E (furniture, fixtures, and equipment). Because most of the business and the wedding world is not, repeat business, he can count on much goodwill (anybody who’s putting a proper valuation on a business if they are being fair will only give you goodwill on that repetition business). Most of the furniture, fixtures and equipment that we have in our businesses (which by the way, is valued at garage sale prices), we will take with us when we leave anyhow.
To build a wedding business that is worth selling, or has value, we need to dominate our niches in art cities. When I talk about dominating our niches we need to be the “go to” people at what we do in our respective industries. To dominate means we need to step out of our fears and jump into the unknown, which can be scary. Usually domination means that we need to learn how to grow our business incrementally without us being the cog in the wheel, that makes each and every wedding go round. We need to be that person who drives a vision- we need to be that person who manages the vision, not the person who makes the vision.
Typically when I see somebody dominate in their industry. They have grown to the point where they need to purchase real estate to maintain their business (they outgrow rental property, their garages and their homes), they have much more from fixtures, equipment and furniture, involved with their business (especially equipment), and most importantly, they have systems of hiring the right people who will be able to make the vision come to life. To plan a proper exit strategy, the number one line on your list needs to be planning for domination.
Until next week. Here’s to your success!


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