Business Insight
Setting Your Business Up for a Successful Exit
As entrepreneurs and shoe store owners ourselves, we’ve bought and sold businesses, representing ourselves and others during our careers. We strongly believe that every business owner should operate their business efficiently, effectively and profitably but do so with a focus on maximizing the exit value. A successful exit plan is one in which the sales price exceeds the value of the components. An unsuccessful exit plan is anything less than that.

We feel that a substantial business value at exit is partially due to the contributions, energy, drive and enthusiasm of contributors other than the owners of the business. Whether they be titled your “Gal Friday” or “Store Managers” or “Advisors” or “Partners,” since the road to success is not a straight line, it takes the efforts of more than just the owner to build a strong business over time that attracts a potential buyer who is willing to pay your price.

Maximizing Business Value Essentials

1. Understand Your Promise:

• Define your brand promise and align it with customer expectations to build trust and loyalty.

• Ensure that all aspects of your business, from products to customer service, reflect this promise.

2. Align with Your Product Offering:

• Continuously innovate and tailor your products and services to meet evolving customer needs and preferences.

• Regularly assess market trends and competitor offerings to stay relevant and differentiate your brand.

3. Streamline Process Development:

• Optimize internal processes to enhance efficiency, reduce costs, and improve overall performance.

• Embrace technology and automation where possible to streamline workflows and eliminate bottlenecks.

4. Invest In Your People:

• Recruit, develop, and retain top talent who embody your company culture and values.

• Provide ongoing training and support to empower employees to excel in their roles and contribute to organizational success.

5. Nurture Strategic Partnerships:

• Collaborate with key stakeholders, suppliers, and partners to leverage complementary strengths and resources.

• Foster long-term relationships built on mutual trust, shared goals, and clear communication channels.

By integrating these elements—Promise, Product Offering, Process Development, People, and Partnerships—you can drive sustainable growth and maximize business value.

Selling a Business for More than its Parts

Selling a business for more than its parts often involves highlighting its intangible assets, potential for growth, and strategic value to potential buyers. Here are some steps to achieve that:

Identify Unique Value Propositions: Showcase what sets your business apart, such as strong brand equity, loyal customer base, proprietary technology, or unique market positioning.

Demonstrate Growth Potential: Present a clear vision for future growth opportunities, backed by data and market analysis. Highlight untapped markets, potential for expansion, or new product/services development.

Optimize Financial Performance: Maximize profitability and demonstrate consistent revenue streams. Improve financial metrics, such as EBIDTA (Earnings before Interest, Taxes, Depreciation and Amortization), to increase the attractiveness of your business to potential buyers.

Build Scalability: Show that your business model is scalable and can handle growth efficiently. Scalability often increases the perceived value of a business, as it implies the ability to generate more revenue without significantly increasing costs.

Invest in Intellectual Property: If applicable, protect and showcase any intellectual property assets, such as patents, trademarks, or copyrights, which can add significant value to the business.

Strengthen Customer Relationships: Emphasize customer relationships and retention rates, as recurring revenue and a loyal customer base enhance the perceived stability and value of the business.


• Can you quantify (with data) the return rate and lifetime value of your customer base?

• The strength of your team is vital. How long have they been with you? Do you have documented employee review history? What formal and informal training have you provided and is it documented?

When Preparing to Exit

• Prepare and clean up your books to have a proper representation of the true Income and Assets. Ensure you engage a team that understands the business transition process, including a CPA, Lawyer, Certified Exit Planner, Taxation Specialist and Financial Planner.

Create a Comprehensive Sales Package: Prepare a report on your business that highlights the strengths, opportunities and potential risks of the business, including financial statements, growth projections, market analysis, and other relevant information.

Engage with Strategic Buyers: Target strategic buyers who can benefit from acquiring your business beyond its financial assets. These buyers may be interested in synergies, such as access to new markets, brands, technology, or complementary products/services.

Professional Presentation: Ensure that your business is well-presented during the sales process. Invest in professional marketing materials, presentations and well-organized data in order to impress potential buyers. Your financial records should be easily understood, maintained according to generally accepted accounting practices (aka “GAAP”), and your inventory data should be well organized, easy to understand, and indicate value in the stock on hand.

Negotiate Wisely: Negotiate from a position of strength by understanding your business’s value and being prepared to justify it. Highlight the long term benefits and strategic advantages that the buyer will gain from acquiring your business.

The Basics of Planning an Exit

• You can’t begin the process 3 months before you want to sell! Your business should ALWAYS be ready to sell. Someday you WILL exit your business: Death, Divorce, Disability, Distress and Partnership Disagreement are the big 5!

• Aside from your asset or book value, the items that begin to add multiples are around the strength of your Customer Capital, Systems Capital, Team Capital and Social Capital – All of these are crucial steps in showing value to the new owner. They all need to be documented, not just in your head.

• Remember, outsiders will look at your business through a different lens than you do. They will pick it apart, both financially and systematically.

• Owners often have a belief that their business is worth much more than it actually is, especially if they can’t provide proof of the aforementioned items.

A few Interesting Stats

• 75% of business owners want to exit their business within the next 10 years (most haven’t even started planning yet).

• 70% of businesses listed in North America every year do not sell.

• 75% of owners regret selling 1 year after the sale as they had no formal plan for life after the sale

• Only 30% of family businesses transition to the 2nd generation and only 12% survive the third generation

By following these strategies and effectively communicating the value proposition of your business, you can significantly increase the likelihood of a successful exit, selling your business for more than the sum of its parts. n

Alan Miklofsky is a semi-retired shoe industry veteran and contributor to Footwear Insight. This is his twelfth article in Footwear Insight. After a 40-year award winning career as a retailer, long-term board member of the NSRA (which included a stint as its Chairperson), Alan is currently a business consultant.

Pete Mohr operates two Shoetopia stores in Canada and dedicates much of his time to coaching business owners on how to transition from operators to owners through his coaching venture, Simplifying Entrepreneurship. Pete is also a Certified Exit Planner and a Certified Kolbe Coach. He can be contacted at