What’s the plan for selling your business?
Are you a hardworking employee of a pool and spa service business? Do you have an aptitude for numbers? Do you have a fundamental understanding of accounting, or at least the ability to learn it? Are you a people person, and do you know how to be a salesperson?
According to a recent Service Industry News survey of pool and spa service owners, a surprising number plan to turn over their businesses to their top employee. That’s right – your boss may be vetting you to take the reins, even as we speak. This month, Service Industry News asked pool and spa service owners a series of questions regarding their retirement plans. Specifically, what is their exit strategy? To whom will they sell their business? An impressive 11 percent said that they intended to sell their business to an employee.
Some hope to sell the business outright, so if you are a hard worker, perhaps you’ve already started saving and investing. But many intend to help finance the transition, understanding that even the savviest of their workers may not have that kind of cash in hand when the time comes. And let’s face it – as the last of the baby boomer generation is already thinking about retirement, that time is coming soon.
A large number of pool and spa service owners are reaching retirement age now, and they are trying to figure out their exit strategy.
For business owners with children or relatives in the industry, many intend to turn their company over to the next generation. According to our survey, 11 percent of our readers plan to bequeath their business to a family member.
Many business owners plan to go through a route broker. According to our survey, 15 percent plan to do this. (See our story on Route Brokers on page 19) A number of owners hope to sell their business privately by finding another service owner to buy their company. They will advertise the sale of their business through pool industry publications such as this one, (See Pool Routes for Sale on page. 29), or by listing their routes at supply houses, or on the Pool Trader app, and elsewhere. For those who don’t know about the Pool TraderApp, you can read about it in the February 1, 2022 edition.
According to the responses from our survey, 16 percent hope to make a private sale of their business.
Then there are those who mean to die with their boots on. Of those who responded to our survey, 7 percent plan to work for the rest of their lives and didn’t articulate their plans for what will happen to their businesses when that day comes. Despite the fact that the median age of our survey respondents is 59, and plan to retire in the next five years or so, a surprising number of business owners do not know how they intend to sell their routes. Nearly 40 percent of the respondents to our survey said they simply did not know how they plan to retire.
And for those with employees, they may be seriously considering you, and many will do whatever they can to facilitate a successful transfer of power.
Employers want the sale of their life’s work to be a win-win for all parties involved. And in many cases, they have a vested interest in the company continuing to thrive.
That’s because some of those who plan to sell their business to an employee will be using the proceeds of that sale as part of their retirement plan. The general arrangement is to sell to the employee and have the employee pay off the sale using the profits of the business, in some cases, through the life of the former owner. Having a nearly guaranteed source of income until death can represent an enormous level of security for many retired business owners.
So, if you are a hardworking employee of a pool and spa service, with ambitions to one day own your own business (even if that day seems like it’s in the distant future), it’s a good idea to start familiarizing yourself with some of the basics of business ownership.
Because, who knows – your boss may very well have you in mind when the time comes to retire.