Like many independent retailers in our industry, I started my business fueled by a passion to help people with safe natural options to live and enjoy wellness. Opening the door each day and being successful was a one-day-at-a-time endeavor, a committed challenge I willingly took on as I helped my community learn and use natural products. It never occurred to me that I should have an “exit strategy.”
The first time I heard this term was at a session by a well-known presenter I just happened to sit in on at a tradeshow. Having attended many of his seminars before, I had assumed it was a technique or new business tip that would help my day-to-day operation. But as he talked, I was shocked into realizing he was discussing something I—and apparently many of my colleagues around me—never considered: an end plan.
Now, as I near ‘retirement’, this is a real, up-front issue for me. Here are the scenarios I have considered:
- Passing it on to family and preserving the legacy. This situation could be enormously successful yet at the same time a bit emotional. In my case, this is not an option, as our adult children have established careers in other cities and logistics just does not make this a realistic consideration.
- Liquidation: Only as a last resort and certainly not now.
- Sell to employees. Exit planners suggest that this could be a win-win situation as current staff know a great deal about the business and would be enthusiastic to see it succeed. One way of setting this up is through an Employee Share Ownership Plan (ESOP), which is a stock equity strategy for employees that lets them acquire ownership in the company. This requires a bit of legal work which I have not delved into yet. Another option might be to outright sell to a staff member. I have considered this too, but not completely sure this is an option at the present time.
- Selling my business on the open market, apparently the most popular option for small businesses. But putting the business up for sale for a certain price is a hopeful proposition in that one hopefully walks away with the amount of money one wants to get for it. Though selling price is based mostly on examination of tax filings and store performance, one needs to spend a bit of time grooming the business for sale, making it as attractive as possible to potential buyers. And that price is sometimes a lot less than what the owner wants or believes it to be. Yes, I considered this, but can I really let go?
- Setting the store up as a ‘retirement career’ with personnel and staff who run and manage all aspects of the business. Still drawing a salary, the owner become an advisor and part time supervisor of the operation, but certainly not on a daily basis. Yes, eventually I would have to consider one of the options above, but not now.
At this point in my life, this last option is the most likely one for me. I believe I have many more years to contribute and working part time seems sensible. If I sold my business to either to staff or someone else, I am not certain I could remain in my community and watch someone else handle the entity I created and nurtured. It would likely be that emotional. But as a part time retirement career, it certainly would be flexible and offer me something constructive and meaningful to do in my senior years. It’s a matter of ramping my involvement down a bit, allowing me to focus on the many items on my bucket list and enjoy more time away from work.
And certainly, a more definite exit plan, as outlined above will have to eventually be decided, but there’s time yet to figure that out.
The original passion which fueled the beginning of my business is not ready to retire just yet. As a dear friend and colleague and I often jest, we love this industry, and likely, because we do, we will just expire in the aisle as our exit plans.
Pat Sardell is the owner of Country Vitamins in Corvallis, OR.
Published on WholeFoods Magazine Online, 6/7/16
NOTE: The opinions expressed in bylined articles are not necessarily those of the publisher.