Step 7: Sale Or Bail
Objective: Remove yourself from the business
Having a good exit strategy in place ensures that you get the payoff that you deserve for all your hard work. No project lasts forever. Even if it does, life challenges may require you to cash out or bail out.
Why You Might Sell Your Company
Some entrepreneurs build companies for the sole purpose of selling them for a nice payday down the line. Others come across a competitor that they just cant beat, and decide to surrender by letting the competitor buy them out.
You might come to realize that the fashion game no longer interests you, or you want to move into real estate. Whatever your reason, selling is a solid exit strategy.
I am not an expert in business finance, but when I sold my previous companies, I asked for a 12x multiple. That means the buyer would take my earnings for the current month and multiply that number by 12. That would be my selling price.
So if your store is making 3,000 per month and you are looking to sell it at a 12x multiple, you would get a $36,000 payday. You can increase your asking price if you have a big email list, special software, or a system that will keep running on its own with no maintenance well into the future. And if you have followed this guide, you are set up to command a higher than average asking price for your clothing line because it is a system that wont require much work or maintenance from your buyer. They can just buy your system, change bank account info, and they are good from day one. ?
If you followed my advice and built your clothing line using Shopify, then it is easy to sell your store. Shopify has a huge marketplace that you can search through by clicking here that lets you buy and sell whole companies.
You can also reach out to competitors and offer to sell to them. They may be willing to offer much higher prices just to clear the field of a competitor and increase their market penetration.
How To Bail Out Of Your Company
If you cant stand to part with your baby, you can hire a General Manager to run the day to day business while you ‘bail’ for a few months or years. There are two things that need to be in place to make your bail out successful:
1. You need to generate enough revenue to grow the business, pay yourself, and pay a General Manager. Until you reach that level of revenue, bailing out wont be feasible.
2. You need to have written systems in place (for more on systems, click here). This is the ‘bible’ that you use to run your business, and includes all your login information, a step by step guide to creating designs, contact information for your sources, how to maintain the website, and anything else anyone would need to keep your business running in your absence. You are going to turn this system into a manual for your General Manager. Even if you dont hire a GM, you will need to hand this SOP over to your buyer if you are selling your company.
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