While producing a business plan to secure finance to buy is common, creating a plan for the future sale of your business is not. But this is changing thanks to Chem-Dry’s new approach.

Chem-Dry, the world’ largest carpet cleaning franchise, and now in it’s 30th year in Australia, is adding value by working closely with its franchise partners to educate and help them prepare for the final leg of their business journey: resale.All franchise partners move on at some point, so it makes good business sense to help them develop a plan for how and when that happens.

First Time Business Owners

“Because the majority of our franchise partners are first-time business owners, they are also first-time business sellers and many aren’t sure where to start.”, explains Chem-Dry CEO Alan Biddle. Alan explains: “Selling your business is very personal, so owners often shy away from asking for assistance. For many, thinking about the long game has never been a priority. When people buy a business for under $50k they often view it as buying a job. They focus on generating a healthy weekly income and never really focus on the asset they are building in the process. We’re trying to change people’s mindset.”

Franchise partners are often unsure what their business is worth, or how to put a value on their hard work.However, once they do this, the greater challenge is how to effectively communicate that value to a potential buyer, and secure a successful resale.

Value

How do you communicate value? “By making sure that your systems, procedures, and financial records are up to date at all times, your equipment is in good working order, and your client databases are accurate for starters”, shares Alan. “These are what initially attracts a buyer to an established business is always ready for sale, because you never know when the right buyer will come along”.

“It all comes down to planning correctly to be ready for sale”, says Alan. “You’re not in business forever, so you need to think about your exit strategy right from the start”. This year Chem-Dry has completed seven resales, with an average resale price over $100,000. This is significant when you consider that a new start-up franchise costs just $40k, and highlights why it is so important for franchisors to work with their franchise partners to unlock the value in their business.

Seeing established businesses selling for higher prices also has flow on effects, and is considered to be a good indication of a healthy network. So what type of people are buying Chem-Dryfranchises? “We are starting to see younger, more entrepreneurial business owners with marketing and sales backgrounds who aren’t interested in only being an operator. People who want to step out of the tools and build a business that can scale”, says Alan.