Know Your Exit Strategy

By Kerry Roy

You’re fresh, motivated, determined to start the journey in developing your dream Glamping business and succeed. So why plan your end when you’ve only just began?

The Beginning Is Not The End

Whether you’re writing a professional business plan, planning from the clouds of your dream boards or sticky notes pad, a plan of how you will end the business is just as important as the plan to create it. Without it, you can risk leaving yourself hanging high and dry with nothing but the crumbs of the fine loaf you originally baked. An exit plan is a ‘must’ to add into any partnership agreement.

You Are Number 1, Always Protect Yourself

TThe type of business ownerships forms vary from solo Glamptreneur, family enterprise, 2-4 way partnership, limited company or investor partnership. If you began as a solo or family enterprise, with substantial growth you may find that over time you bring in alien investors or partners to help manage the growth process or take the weight of some responsibilities off your shoulders.

Choose with caution; if you are not familiar with how investor partners operate, or a stranger partner’s true motivation to join the business, no matter how impressive their history curriculum vitae reads, you can risk losing a high percentage of shares and in some cases all of what you worked hard to originally create. Understanding the different variations of partnerships with an agreed exit plan is key to a healthy successful business relationship. I always strongly advise investing in having a good legally bound contract. It’s worth its weight in gold!

Land Owners

As a land owner you may decide to eventually sell the whole property and business, which is often valued a lot higher than that of sites who rent space on other people’s land. Depending on the size of the business, the property and land can add a substantial amount to the overall value. Property and land often increase in value over the years whereas Glamping structures (especially tented/canvas forms) decrease in value as soon as they leave the showroom. Don’t wish to sell your property? You don’t have to. There are ways around selling the business or selling some of the responsibilities with a share agreement whereby you keep full sole ownership of your property and land. Setting up a limited company enables you to separate the business from the actual property, while also protecting your home or additional valuable assets from the running of the business itself.

There are, of course, legal avenues to explore and a good accountant needed to make it a smooth process, but the benefits are that you can potentially sell off the business on a long lease term while gaining an annual land rental income.

Another option is to sell it as a partnership lease agreement, whereby the new owner takes on the larger share of running the business and you take a back seat whilst keeping annual share ownership in the business and still being able to have a smaller input – depending on the percentage of shares agreed.

Businesses on Rented Land

Land and inflated mortgage rates unfortunately don’t make it easy for all to set up their dream business on their own turf. But if you build castles in the sky, you need to ensure you have good foundations under them! So with a good exit strategy, you maybe one day can build your own castle on your own land if you wish – as I did.

The key to a good exit plan on rented land is a long-term lease agreement. The longer the lease, the more valuable the business will become and more attractive to a buyer or investor. A short-term lease can significantly devalue a business, no matter how good the profits are. Buying a profitable business without anywhere for it to operate longterm is like throwing money into the fire. A buyer needs security in knowing that the business has longevity for a successful future and growth without having to move location or the fear of being kicked out by the landlord.

Value in The Sales Not The Structures

Like a car, many glamping structures will be added onto your asset accounts list with an annual depreciation value. Depending on how many years into the business you plan to sell, you can determine the level of investment required from a potential new owner to freshen up older, worn, used structures. This is a good reason to choose products that have a longer lifetime without the need of too much maintenance and fresh investment.

Profit, profit, profit is the name of the game to increase the value of any business, while keeping those costs down. It’s a simple formula: lower costs = higher profits. If businesses don’t keep the end in sight, it’s easy for many to carry on in a way that suits their current situation, rather than anticipating what might lie down the line. For example, some may increase costs with various personal items to show less profit, resulting in the need to pay less tax. Some may take out director loans – and why not? It’s their business and they have worked hard to enable that interest-free loan with no rush to repay – but the black and white accounts papers won’t forget when it comes to a sale valuation of the business.

The best advice I can give is when you begin to see the timeline of your exit plan, do all that you can to keep the accounts squeaky clean. Being free from debt, with creditors paid up, directors loans repaid and higher profit margins with strong future bookings will make your exit as enjoyable as the day you started the business!

About Kerry Roy

Solo female glamptrepreneur Kerry Roy founded her first multi award-winning glamping site in the UK, Camp Katur, in 2012. She has since diversified into many different areas, including festivals, weddings and wellness retreats – whilst establishing a second successful award-winning glamping retreat, Cerchio Del Desiderio in Italy in 2019. Not one to stay still for long, she also joined forces with Glamping Innovations to distribute innovative and sustainable glamping structures throughout Italy.

Kerry has also been fortunate enough to take part in several TV programmes focusing on her businesses’ success and ever developing knowledge within the industry, inspiring others to run their own business in various sectors. You can follow her new Italian business adventures on the latest series of Channel 4’s A New Life In The Sun, for which she continues to film for the 4th year.

Kerry Roy