How to Build an Exit Strategy for Your Sports Facility
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 conclude with your personal sports facility 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. This assures them you are protecting 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”, 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, and the agreement should 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. It’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, because it 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. Complementary businesses – like apparel or equipment stores – or your competitors could look to expand their business into your location someday.
- Current employees. It’s common for facility staff to be interested in purchasing the sports facility where they work, and 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 make payments over time rather than buy the whole business upfront. Unfortunately, this often results in plenty of headaches if the new owners stop being able to make payments. Get as much money upfront as possible to avoid 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. They may find buying your business outright more practical.
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. This isn’t the option you want to include in your formal business plan. But it is worth noting your assets and the resale value of your equipment and infrastructure.
Add Your Exit Strategy to Your Business Plan
Now that you understand your options, summarize your sports facility exit strategy 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 industry.
That’s it — we’ve come to the end of the business plan series. We hope you’ve found some useful information. Let the eSoft teams know how we can help you be successful.