Your business exit profitability is directly dependent upon the ability of your business to continue to operate at a sustainable or profitable level.

Business succession problems are the result of one or more of the five weaknesses that I have previously identified:

Reason #1 was strategy weaknesses.
Reason # 2 was structural faults.
Reason # 3 was situational errors.
Reason # 4, sustainability breakdown, is the subject of this post.

Three sustainability breakdowns have the potential to impact the success of your business exit, and therefore your business exit cash flow and profit.

The 3 sustainability breakdowns that cause business succession problems:

1. Family Business Continuity Problems.  In Chapter 10 of Your Business Succession the Cabernet family represents an example of the difficulties associated with business continuity when one or more co-owners want to exit, but the remaining owners wish to continue. If the owners who wish to continue do not have the financial capacity to buy the exiting parties’ shares, they can be forced to give up their life’s work.
2. Buyer Market Limitations – Barriers To Entry. The barriers to entry into your business may limit the number of potential available buyers in the marketplace. This, in turn, may delay your business exit if adequate time and planning is not applied to find a suitable successor. Main barriers to business entry include:

• licensing and registration restrictions
• financial limitations
• funding limitations
• emotional barriers
• the burden of debt

3. Failure To Recognize When It Is Time To Leave. Staying beyond a reasonable time can drive a business into ruin if you’re no longer capable of running it at peak performance. You must be truthful with yourself about when the right time is to leave if you want to exit your business with maximum cash flow and profit.

In my latest book, “Your Business Succession | How To Exit Your Business For Maximum Cash Flow And Profit” you can read three real life case studies which detail the sustainability breakdowns suffered by business owners in three very different industries, and how those issues could have been avoided with the right business exit strategy.

Your business exit strategy should cover all the relevant sustainability issues we have just identified.

In a future series I’ll share some case studies that will help you to understand the influence of each of these sustainability breakdowns in detail, so you can plan how to overcome these problems before they can have any impact on your profitable business exit.

In the meantime please feel free to take advantage of these resources to make a start on your profitable business exit strategy now:

1. Take the Business Exit Quiz (5 minutes of your time) and find out where your business exit strategy may be letting you down, and how to improve your chances of building a business for maximum profits and cash flow
2. Read my book “Your Business Succession” to discover what you want to do to ensure you will be prepared to sidestep any of the  sustainability issues outlined in this article.
3. Contact our Business Succession Strategy office to plan your business exit strategy, so we can eliminate the stress of making the right decisions for your best chance of maximizing your business valuation for a profitable exit.

To Your Profitable Business Exit,
Leigh Riley

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