Signs you should part ways with your children’s activity business

One of the impacts of Covid-19 we’ve noticed recently is some children’s activity providers seriously considering their future. 

The past 12 months have been challenging in more ways than one. It’s given people time to reflect and think carefully about where they see themselves heading.

When starting up, very few activity providers consider their exit strategy, but it’s an incredibly healthy part of business ownership.

It’s likely in part due to a knowledge gap. They may not know anyone who has sold a business before and our sector traditionally isn’t known for the fast paced ‘start, scale, sell’ attitude of other industries. That said, ICAP has spoken to three active investors/buyers who are looking at the market right now and keen to speak to people willing to sell their business, from those with zero profitability to large franchise network sales. If you’d like more information about this contact us for a confidential chat.

There is significantly more information online about how to start a company, rather than exit one. It’s the exciting part of running a business when ideas are flowing and motivation is high. It may also seem a little strange to consider the end when you’ve only just begun. 

So, why sell your activity business?

Understanding your motivations for parting ways with your business is essential to ensure you secure a buyer, price and the right terms of a deal.

Perhaps you don’t think your business is worth that much and wouldn’t be worth the hassle even to pass the business on for ‘free’? 

However, wouldn’t it be great to see your programmes, systems and processes outlast your ownership? If so, you could consider selling for a nominal fee to someone who wants to try and turn the brand you created around with renewed energy and vigour.

Regardless of whether you want to sell your business for a large fee or hand it over to someone else for very little, how do other activity businesses know the right time to move on? In reality, it will come about from a mixture of business and personal reasons unique to the owners.

Here are some of the most common reasons we’ve seen in the sector:

1. Retirement
A very common reason for selling a business – coming to the end of your working life you may want to ensure you leave a legacy of some sort and move the business on to someone else rather than simply close up shop.

2. Health reasons
Sometimes owners will receive bad news about their health or they’ve simply neglected it for too long and now need to take priority over the business and they can’t continue.

3. Seeking better work-life balance
Many activity providers startup in search of work-life balance. Many achieve that, others don’t. It’s likely you’ve experienced periods of stress or exhaustion in the past and sometimes knowing when to step back or change your lifestyle is important for your family.

4. Boredom 
Sometimes people prefer the thrill of starting something new and when it comes to the day to day operations when up and running, it’s not quite so exciting dealing with the inevitable challenges and growing pains that come with a business. It’s not uncommon to simply want a new challenge and Covid-19 has given time to reflect and understand that.

5. Business has plateaued
If you’ve recognised that instead of growing and developing year on year, you’ve reached a peak and can’t get beyond it. It’s quite hard to see this but frequently occurs and sometimes will need new leadership, investment or impetus.

There are many other reasons you may want to exit your business. 

Regardless, it’s important to know a buyer won’t typically ‘fall into your lap’. If you decide to sell or find someone to take the business off your hands, it can take time (average is typically over a year from advertising to legal sign off) so be prepared to start the process ideally before you run out of steam and have a clear strategy in place of how you will go about advertising the business for sale and finding someone appropriate to takeover.

Maybe you don’t want to sell, but need some investment and outside expertise to join your leadership team.

In this instance, taking on a Non-Executive Director or partnering with someone to compliment your own skills could be something to seriously consider. If you’ve ever thought of doing this, now could be a great time to approach someone you know who you think would add value to your business. We’ll aim to cover this more in a future post.

By becoming a member of ICAP you’re joining a community of like-minded professionals and business owners in the children’s activity sector working towards excellence

Pip Wilkins

Pip Wilkins is the Chief Executive of the British Franchise Association (bfa). With 25 years’ experience in the franchise sector, Pip has worked her way up within the Association, gaining insight from all areas of the business and the franchise industry. She is well-known and highly regarded in franchising for her dedication and depth of knowledge. Pip regularly speaks at conferences and seminars both domestically and internationally, as well as writing on franchising matters for national, local and franchising trade press. Pip is also a regular judge for the annual bfa HSBC Franchise Awards, the Franchise Marketing Awards and Global Franchise Awards. Pip represents the UK at both the European Franchise Federation (EFF) and World Franchise Council (WFC). The bfa has grown to be one of the largest franchise associations in Europe, and one of the most successful associations in the world.

Theo Millward

Theo Millward is a graduate of Lancaster University with a BBA in Management. In 2016 Theo purchased UK swim school, Swimtime from the founders which teaches 20,000 children a week. Following a multi-award- winning digital transformation, during the global pandemic, Theo and his team founded Franscape, a saas that digitally transforms Franchise brands. FranScape won New Business of the Year at the UK Business Awards.

Andy Georgiou

Andy is the Founder of ICAP and a leading UK Franchise Business Consultant. He is fiercely committed to helping children’s activity providers build successful and profitable businesses. With qualifications in Business Management, Digital Media and Marketing, he has helped build, advise and grow leading 6 and 7 fiqure children’s education, sports and activity brands in the past 17 years.

Frank Sahlein

Frank has been active in the Children’s Activity Center industry as an athlete, coach, business owner, consultant and business broker. He is a native of San Mateo, California and graduated from San Jose State University in California (USA).
Frank was a pioneer of the Children’s Learning Opportunity Center concept from 1976 – 2016 at the Wings Center in Boise, Idaho (USA) – a blend of Sports Instruction, Arts, Education, Entertainment and Outreach programs.
As a business management innovator, Frank has delivered over 1,000 presentations for a variety of Children’s Activity Center industries such as gymnastics, swimming, cheerleading, dance, martial arts/ninja and child care/education.
3rd Level Consulting is a Business Development and Service Provider Partner for private industry companies, associations, and organizations in the USA, Australia, Canada, New Zealand, Singapore, the United Kingdom, Mexico, and Panama.
Two-time recipient of the National Business Leader Award from USA Gymnastics, Frank is the author of “Building Your Business Potential” and “Designing Your Empowered Life”. He is the creator of the SmartEDGE™ Business Applications and Management Certification Courses. He is the co-founder of LEAP Learning and the MetaSpheres Corp, and is the founder and Executive Director of the International Association of Child Development Programs.
His passions include his beautiful wife Lourdes Gonzalez, family, friends, fitness training, transformational reading and travel.