Business Succession Strategy Weaknesses

In a previous series on why too many business owners fail to exit their business with maximum cash flow and profits, I identified 8 business exit strategy weaknesses that may contribute to a disappointing business succession outcome for you.

My last post pointed out the pitfalls of failing to value your business properly, and this post explains why you want to move your business from the Unilateral Zone of Value™ to the Three Dimensional Zone of Value™ so that your business will have the highest possible valuation at the time of succession.

Why You Want To Move From The Unilateral Zone To The ‘Three Dimensional Zone Of Value’™ In Your Business – Case Study

Fritz was the successful owner of a car dealership that he had operated for more than 20 years. He proudly conveyed that the primary value in his business was his own personality and ability to develop relationships. He was resolved that he was the sole reason for the business success and he knew when the time arrived for him to leave, he would have nothing to sell other than stock, the premises, office equipment, and other goods and chattels.

Fritz admitted to having no formal arrangements with customers and suppliers, who continued their association simply because they liked to deal with him. He considered his staff to be mere instruments for backing him up in the operation, because they added no value to his business turnover or efficiencies without his specific instructions.

Fritz’s biggest complaint about having a business was that he could not get enough time away from it to relax and enjoy some of his success. This is a classic example of a business operating in the ‘Unilateral Zone of Value™’.

This example demonstrates a business strategy problem, but it also is representative of a case with leadership, management, contingency and continuity problems.

Obviously Fritz needs to develop his car dealership from the ‘Unilateral Zone of Value™’ into the ‘Three Dimensional Zone of Value™’ if he wants to increase the business value, and therefore the selling price at the time of exit, which could occur either at a time of his choice, or by circumstances beyond his control.

How to build your business value to the Three Dimensional Zone of Value™ is discussed in more detail throughout my book, Your Business Succession: How To Exit Your Business For Maximum Cash Flow And Profit with specific solutions to Fritz’s predicament in Part 5.

How well prepared are you to exit your business with maximum cash flow and profits?

Take the FREE Business Exit Quiz (5 minutes of your time) and find out where your business succession strategy may be letting you down, and how to improve your chances of building a business for maximum profits and cash flow

To Your Profitable Business Exit,
Leigh Riley

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