Start with the end in mind.

Before I was the CEO for James Home Services Australia I was a Business, and Economic Development Consultant. I worked with Government and private enterprise, big and small, across a broad array of industries from renewables, health, tourism and agriculture to services and retail both here in Australia, and internationally.

In that role, I would work with clients on all sorts of projects, including start-ups and business acquisitions.

I would be meeting with a client to help them plan how to start a business, or how to acquire a business. It was exciting, it was fast paced, it was nerve racking and it was high energy, loads of ideas, endless possibilities and blue sky thinking.

In the midst of all the excitement… I liked to ask this question… how will you exit?

Most of the time, it was a total mood killer. I would get blank looks and confused expressions, before always the same response… ‘Ah, Rhiannon, we’re here to talk about starting this business, why would we talk about exit?’

To which I would reply… ‘If we know what we’re aiming for, then it means that every decision we make along the way is intentional and has that outcome in its sights. It means we can get you where you want to go faster, and more directly.’

So… how will you exit your James business?

This blog article is as much for our existing business owners, as it is for anyone considering starting their cleaning or lawn mowing business with us.

Here are the various ways you can ‘exit’ your James business.

Sale

This one’s the most obvious, and frankly, the most advantageous for you. Your hard work becomes an asset with value that you can realise. Even though you are working within a Franchise Agreement, you still have the right to sell your business at any time. And, it can be a big plus for potential buyers… not only are they buying an established business with reliable income, they will also benefit from all the backing and support of the James network so even if this is their first time in business, this may just give them the confidence to go ahead.

If sale is your goal, then you want to be working to maximise profit in your business. Any sale price, is simply based on the profit in the business. If the business isn’t profitable, then the sale price may only recognise say value of equipment. If the business is profitable, then a buyer will be prepared to pay more for it.

So, in the lead up to sale you want to be working hard to add more customers to your business to maximise profit, you want to ensure that any regular jobs that you underquoted initially have had their value increased, you want to have a tight hold on your expenses, you want to ensure new jobs are being quoted at a fair but high rate in your market. All these things are working to maximise your profit.

You also want to ensure your equipment is all well maintained with no breakages. You want to work hard at your marketing so your business is ‘known’ in your local community and your organic enquiries are increasing (that shows a potential buyer there’s still growth and upside in the business if they want it), you want to ensure your Google Business Profile is consistently being updated, and new reviews are being contributed – as this will be the main marketing and visibility engine room for any new owner.

All these points will help your business stand out from others the buyer may be considering, and therefore, it will help to make the value of your business higher in the market.

Transfer

Transferring your business is like a sale, but the buyer doesn’t pay you anything. This can occur when your business isn’t profitable as it is, but nevertheless, you find someone who is willing to take it on, and can see the potential to make it profitable under their ownership and management.

In this case, a transfer is a great outcome for you, because it still transfers the Franchise Agreement and all your responsibilities and obligations to operate the business to the new owner (just as a sale does), relieving you entirely of those obligations.

End of Term

A Franchise Agreement is always for a ‘Term’; in our network, that term is usually 5 or 7 years, depending on how you purchased your franchise business in the first place.

As you approach the end of your term, you can decide what you’d like to do. You may choose to find a buyer for your business, or, if you really feel your business owes you nothing, and you can’t be bothered with the stress of a ‘sale’, then you can simply choose to cease operating your business once your term expires.

If this is the case, then we would simply help walk you through a wind-down process as the end of your term approached, and guide you on things like cancelling your insurance, your business name registration, transferring your customers to surrounding James business owners who can continue to service them to our standard and so on.

At the end of your term, all our Franchise Agreements give you the option of simply moving to a month-to-month agreement. So, if you’re not quite sure what you want to do, you can simply let the Agreement fall month to month to give you shorter-term flexibility.

Early Exit

You can, exit your Franchise Agreement early. This is called entering into a Mutual Termination Agreement with us.

This is not necessarily ideal for you as a Franchise Agreement operates in the same way as a rental agreement. If you have to ‘break lease’ in your rental agreement, then you’re still responsible for the rent payments up until a new tenant can be found. Same with your Franchise Agreement, you can ‘break’ it, so long as you’re aware that you’re still responsible for operating the business up until we find a new franchisee. If operating the business isn’t possible, then we will agree to allow you to cease operations, but you would still be responsible for any fee payments up until a new business owner can be found, or the end of the term, whichever comes first.

Because of this, it will always be our focus to help you grow a profitable business, that, if need be, can be sold to a new owner to avoid the situation described above. A profitable business gives you options and control. So, no matter what exit you’re planning, profitability should be part of your strategy to give yourself options.

In our network, we’re on a mission to normalise the exit conversation. We know circumstances change, we know ‘wants’ and passions change. We know that sometimes, different opportunities come along that you want to take. We are realists, we know, not everyone will be wedded to their James business for the next 30 years! So, instead, let’s normalise that businesses and their owners separate all the time, for all sorts of different reasons.

Whatever your reason, let’s chat about it early, so we can help you plan for an exit your firmly in control of!

Rhiannon Simcocks, CEO.