Residential Real EstateFive Key Objectives To Plan Your Sell-Your-Practice Exit Strategy
Tips from the 20th new rule of online marketing
Old Rule: Retirement means declaring victory and turning out the lights.
New Rule: Retirement means selling your practice to the highest bidder.
What is your biggest dream? Your highest goal? What gets you up in the morning and keeps you working faster and harder every day?
Let"s assume -- and I don"t think I"m going out on a limb here -- that retiring with financial independence is at the end of your personal rainbow. Or maybe selling your practice and moving on to a new market is the next step toward your ultimate goal.
The good news is you can create a sell-your-practice exit strategy, beginning right now. The other good news is that you don"t have to take time or energy away from your current marketing and business strategies to do it. These three plans -- marketing, business, and exit -- can (and should) work hand-in-hand to grow your business and feather your retirement nest at the same time.
Sell-Your-Practice Exit Strategy
Your sell-your-practice exit strategy begins with a long hard look at reality:
What are your greatest business assets?
How does your practice compare to your competition? What does your business promise and provide that makes it stand out from the competition?
Could a buyer of your practice step into your brand and systems and run the business without missing a sale?
Once you answer these questions, you"ll not only know where you want your business to go, you"ll have a clear picture of your starting point. An etched-in-stone list of objectives will set things in motion and serve as a roadmap from start to finish -- both showing progress along the way and keeping you on track.
"Plan your work, then work your plan."
Here are five essential objectives to get you started.
Develop and maintain a completely automated prospect drip system that tracks sources for new leads, captures e-mail and postal addresses, and responds automatically with a series of automated drip e-mails and direct mail marketing. A successful automated system also includes your network of past clients and sphere contacts, as well as prospects, and will become one of your greatest business assets.
Keep your prospect and customer databases current and continue to add personal information for each contact such as property data, hobbies, special interests, birthdays, important anniversaries, and number and ages of children. This will keep you one step ahead of your competition and give you reasons for frequent contact. Remember, a property -- regardless of who lives in it currently -- can be as valuable an asset as the homeowners, especially previously sold listings.
Establish an identifying brand name for your practice that reflects and symbolizes your business, your services, systems, experience and reputation. Your brand represents the sum total of everything you have worked so hard to build. It"s your corporate identity and a key sellable asset, but it"s not your name. Sad to say, your personal name has little value to the buyer of your business. In fact a "personality brand" will actually lower the value of your practice due to costs to replace it. A brand name should be:
Descriptive of your practice
Relatively short
Easy to spell
Easy to remember
Branded as a web address, website and logotype
Build a track record you can bank on. A three-to-five-year record of profitable financial statements, along with your active listings and buyer agreements, will become the basis for valuation of your practice. Start now to track and account for your business activities. Monthly and yearly reports will provide concrete evidence, based on your audited accounts, that a new buyer can step in and duplicate your income. "Do this, and you"ll earn that!" your records will shout.
Eventually, you will want to prepare a Sale Prospectus that documents and outlines the information interested buyers will need to evaluate your practice. A prospectus usually includes information on these aspects of your business:
Practice beginning and milestone dates.
Customer database counts, especially past clients.
Track record of website generated closed commissions.
Active listings, pending contracts, active buyer agreements.
Key valuation factors: expired listing ratio, buyer kick-out percent, average commission, list-to-sales price ratios, market turnover rates, days on market, closed referrals ratio.
Intellectual property: domains, web sites, trademarks, copyrighted marketing materials, slogans, phone numbers, vanity license plates, vehicle car wrap, etc.
Real property such as automated systems, office equipment, computer hardware, software, telephone system, moving truck, and real estate.
List of employees and job descriptions.
Biographies, titles and responsibilities of owner and other key personnel.
Systems, administration, business philosophy.
Competition.
Explanation of debts, leases and any pending legal matters.
Financial statements showing a five-year history of profits and three to five-year projections.
Basic resource sites such as Capital.com are helpful to buyers and sellers of businesses in general. For example Capital.com"s section on "Buy or Sell a Company" and "Value a Company" have straightforward explanations on the basics of selling a business.
Plan to give yourself a 1-2 years to position your practice to sell, and about 4-6 weeks to close the sale of your practice if you use a business broker. Before you put your practice on the market, however, make sure you have a practical understanding of all your options. There are several paths you can take, depending on how involved you want to be with the business after the sale -- if at all.