THREE-YEAR The PLAN

Critical for Your Exit Strategy

Ihave spent the past several months talking to you about the steps you should take to get your finances in order. This was done as part of a bigger picture I refer to as the “The Three-Year Plan” to be prepared for your exit strategy. Why three years? If your financials are in poor order presently, it is necessary for you to clean them up and maintain them for three years. Potential buyers, and their banks, will want to see this three-year history. There are some additional steps you can take in the meantime.

You will want to prepare and keep up to date a handful of important documents. Having these documents ready to go when you decide to pull the trigger on your exit strategy will be very helpful.

• Asset List

• Maintenance Records

• Recent Improvements

• Vendor List

Asset List

Compiling and having an asset list readily available serves two purposes. It gives a prospective buyer a good look at the capital equipment in your building and how old it is. If the buyer is using a bank, and especially an SBA, they will require this document as part of their approval process.

I would use $500 as the benchmark for including items on this list. This would include equipment such as computers, printers, POS hardware, and lane conditioners.

Maintenance Records

Having a good maintenance log to show a potential buyer shows that you have been keeping your equipment in the best shape possible. You will want to keep records of maintenance on the following:

1. HVAC System

2. Roof

3. Plumbing

4. Electrical

5. Lane Machine(s)

6. Pinsetters (Separate Log)

Recent Improvements

Keeping a list of recent improvements again shows to a potential buyer that you have reinvested back into your business. I would keep the list to the past five to seven years unless it is a large capital expenditure such as a brand new roof or HVAC system.

Vendor List

Having an up-to-date vendor list is something expected by buyers prior to them taking over. Preparing and maintaining this document now will save you the heart ache of having to rush to put it together at the last minute.

Other Steps To Take

There are a couple of additional steps you can take to help maximize your selling price. When was the last time you walked the entirety of your facility and took note of things needing an update? How many different streams of revenue do you have? What have you tried recently to increase revenue?

Facility Tour

While the facility is closed and quiet, grab a pen and tablet and walk your facility. Turn on all of the lights so you can see well. You are looking for things that don’t look as good as they used to. Don’t forget to include restrooms, kitchen facilities, and storage spaces. Here are a few things to be looking for:

• Stained or worn flooring

• Non-working or lack of proper lighting

• Painted areas needing a fresh coat

• Ceiling tiles missing or stained

• Bathroom fixtures that have seen better days

Make sure you write down everything you see that needs work. Make a plan to correct everything on your list over the next year or so. As you mark these off this list, make sure you add them to your recent improvements list.

Increase Revenue

Potential buyers will want to see year-over-year increases in revenue to show that the business is not just maintaining but growing. Making sure that you are increasing your prices to keep up with the times is a small way to show this.

Diversifying and adding additional revenue streams is another good way to increase revenue. If you don’t currently have vending machines in your building, consider it. Depending on your state, adding Lotto, Keno, and Pull Tabs can make you some additional income. Coming up with ways to make your F&B program more prevalent can make a big impact on your bottom line. Consider offering bowling packages that include food. Concentrating on your birthday party programs can also help with this.

Bottom Line: Continually identify and try new ways to increase revenues.

The Three-Year Plan

If you follow all of the steps that I have discussed in all of the articles I have written recently, you will be in the best possible position to sell your center for it’s top dollar value.

Now, does this mean that once you have done all of this work, you have to sell? No, of course not. The beautiful thing about the this exit plan strategy is that you can just continue to roll it forward until you are ready or must sell. You will be prepared.

As always, many of the topics in this article could use a much longer conversation so if you would like to talk further about your specific plan, feel free to reach out to me by email: travis@firstframebowling.com.•

Travis has 15+ years of center management experience and is currently the operations manager at First Frame Bowling and the midwest representative of the Hansell Group. You can contact Travis at travis@firstframebowling.com or (844)923-BOWL (2695).