Has an exit strategy been crossing your mind?

Most of us have built our salons, spas and wellness businesses from the ground up and started them from a place of passion. we've loved creating experiences, helping curate transformations and making people feel beautiful. we've envisioned creating businesses where we could hire inspired professionals and help them be the best in the industry. we've thrived in bustling environments and we became addicted to the buzz often associated with busy spaces. we've lived, slept, and breathed our businesses and found ourselves constantly trying to elevate every aspect of it. there's no doubt about it, it takes a special personality type to thrive in business ownership, especially within the beauty industry.

but, most of us did not build our businesses thinking about the ending. Most of us never thought about an exit strategy. we did not consider what would happen when the exhaustion set in, if and when we burned out, if we grew tired of carrying so much on a regular basis. i was eight years into ownership when the thought crossed my mind, "What happens when I don't want to do this anymore?" i immediately dismissed the thought, because it seemed silly. I had a successful business, it was profitable and on paper, i had security, a great quality of life and no reason to want anything different. but months later, the thought would return and a bit more aggressive this time; "i'd love to not be doing this anymore." and again, i'd bury the thought and keep pushing forward.

over time, what i now call "the teeter-totter effect" became a pattern. when things were coasting, money was flowing and i didn't have team challenges, i felt like i was on top of the world. i couldn't imagine doing anything else with my life and i never thought about my exit. on the flip side, when things were challenging or stressful, the thoughts would come flooding back in and it was all i could focus on. eventually, the teeter totter weighed more heavily on the latter side. so, I decided it was time to start talking with my mentor about what it would look like to exit.

exiting your salon or spa can mean a lot of different things. It can mean hiring a leadership team to do all of the heavy lifting for you. it can mean closing the doors and walking away. it can mean downsizing your operation to a solo-practice and getting back to the technical work that made you first fall in love with the industry. it can also mean selling.

many people wonder: "Is my business worth selling?", "is that an option for me?", "How much money would I get?", "Do i actually want this?" or "I don't even know the first place to start." The truth is, considering your exit strategy can often be an emotional process, because we have so much of our identities wrapped up in our businesses. I recently discussed the emotional aftermath of selling my salon in this article, published by american salon. while there is undoubtedly significant value in preparing yourself for post-sale life, the first step is always strategically preparing your business for a potential sale.

in my coaching work, i've met with dozens of owners who have shared that selling is their ultimate goal. they have created beautiful services, large client-bases, solid teams and great online reviews. but, rarely do they have the structure in place that ultimately makes their businesses attractive to buyers. if you are feeling yourself jumping on the teeter totter and beginning to think about your exit strategy, these are the things I'd start implementing now:

• ensure you are keeping impeccable financial records. buyers want to see clear cash flow in your business. a prospective buyer will need to see 3-5 years of financial records. ensure you have strict accounting, P&L statements, Balance sheets and statements of cash flow. start paying yourself a salary instead of making random personal purchases from your business accounts. create extreme clarity in the way money is moving in and out of your business. consult with your accountant and get your documents in order.

• are you leasing your space? if so, read through your agreement. how much time is on your lease? is it transferrable? if you have less than a year left on your lease, it will make it extremely difficult to sell. i know from personal experience, lease negotiations can be where deals fall apart, so get clear on the reality of your agreement now.

• does your salon or spa require your two hands to earn the money? if your brand is you and not your business, this can valuate your business at a much lower price. consider transitioning yourself out of the treatment room or from behind the chair and focus on training your team and hiring to provide services and experiences as good as, if not better, than your's. start small: introduce your clients to other service providers. Begin building the trust now.

• create multiple ways to earn money in your company. strengthen your service sales and don't forget the importance of retail sales. Your retail should be accounting for at least 18% of your total revenue. think about selling memberships and packages and make sure you are keeping liability sales in a separate bank account.

• start coaching, training and delegating your tasks to other employees. train a lead trainer. train someone to manage inventory. train someone to lead the front desk. outsource payroll. you catch my drift. the less your company depends on you, the more attractive it is to the majority of buyers.

• handle your debt. debt is never included in the sale of a business and will be your responsibility. but, debt never looks great to a buyer, either. so the more you are operating on credit, the more a prospective buyer questions how well your business is operating.

• review your service pricing and adjust based on your cost per hour + desired profit margins.

• stabilize your team. if the culture in your company feels shaky, this is the real work that needs to be done. if there is a bad egg on your staff, get them out of there.

• spruce up your space. when we spend so much time in our businesses, we start overlooking tiny flaws. make sure your equipment is functioning properly and the space appears polished. touch-up paint when needed. the same way you would prepare a house to go on the market, do the same for your salon or spa.

• have a robust s.o.p in place for every task in your company. this can serve as your employee training manual and a "cheat sheet" for a new owner.

• sell while you are on top. if you wait until your business begins to decline or you are so exhausted you stop paying attention to your business, it will be less attractive to a buyer.

• consider a desired time frame to sell. business sales are often lengthy and it is because buyer behavior cannot be controlled. have clarity on how far out you want to sell and include how much transitionary time you'd be willing to offer to a new owner.

• have a professional valuation done long before you want to sell. this will help you get an idea of what your business is worth in the moment and if you want to make any adjustments in your operations that could garner a higher price down the road.

these are a few of the ways to best prepare your business for a potential sale. selling is not for everyone and there are many more things worth considering before you make this choice.

this is the exact work i do with clients supporting them throughout the full lifecycle of their businesses. if exiting has been on your mind, i encourage scheduling a complimentary clarity call with me and we'll discuss the best path forward.