How often does the subject of business succession come up at your dinner parties?

At a recent dinner party I had a conversation with someone who had just started reading my book “Your Business Succession.” This person had lost a business partner to sudden death two years ago, leaving him in a very grim financial situation.  It had taken two full years for the business to get back on track, a task which the remaining owner admitted had been almost too difficult to endure.

When I asked him what he is doing to make sure he doesn’t leave the same situation for his family I was shocked when he replied that he is not thinking of leaving his business for some years, so he didn’t see the point of arranging his succession plan just yet!

Stunned by his obvious lack of connecting the dots between what had happened to his business partner and what could happen to himself, I could not hold back my response which was… “You say this even though you have just experienced first hand the drawbacks of not having a succession plan for the key people in your business! Do you think your business partner planned on leaving your business the way that he did?  Do you really think you will always control the circumstances by which you will leave your business?”

I probably wrecked this guy’s night, because he was awfully quiet for the rest of the evening, but I’m not sorry if I’ve caused him to re-think his need for a succession plan more carefully.  If I’ve provoked in him the desire to take action, then my mission in life will be fulfilled… if I can prevent only one more business owner from enduring the humiliation, stress, aggravation and horror of facing the outcomes of a failed business exit, I will be extremely satisfied.

51% of business owners exit before retirement age

Did you know that In Australia 51% of business owners leave before retirement age, and not all of these are because the owners had a simple change of heart.  Many exit their businesses due to unplanned situations that almost always cause distress, financial loss and all the emotional upheaval associated with situations that catch people off-guard.

I urge you to take note of this message, and to take immediate action to put a succession plan in place to protect yourself and your family.  If you’re not convinced, you want to read my book “Your Business Succession” and discover the 6 succession triggers as well as the 5 reasons so many business owners exit without all the financial rewards and profits they deserve.  Then discover how you can overcome these issues by using our unique system of the 7 Profits Keys because they are the secret sauce that will allow you to enter, execute and exit your business with maximum cash flow and profits.

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

If you want a quick overview of how to fill the gaps in your succession planning, then you can simply take the FREE Business Exit Quiz and you will receive a customised list of action steps to point you in the right direction.

Don’t worry about disappointing me, worry about disappointing yourself and your family and loved ones if you don’t have a proper succession plan that will allow you to profit throughout most circumstances – both planned and unplanned.

Here’s to your profitable business exit!
Leigh Riley

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Business Exit Profits Key #2 | Video

One of your core business exit goals is to keep as much of the profit from the sale of your business as possible. To achieve this you want to have a business succession plan that takes advantage of Capital Gains Tax Concessions that are available to business owners who meet certain criteria.

View this short video to discover four types of Capital Gains Tax (CGT) Concessions that may boost your business exit profits.

Click here to view this video on your iPhone or to download to your computer.

Four tax concessions that may provide capital gains tax relief when you sell your business in Australia.

These only apply if your business meets the definition and eligibility criteria of a small business.

1. 15 Year Exemption provides 100% capital gains tax relief.  It means your business must have been operating for longer than 15 years without any change to its structure or ownership during that period and to qualify you must also meet certain further criteria.
2. 50% Reduction Exemption can provide 50% relief from capital gains tax, but only if you meet the eligibility criteria.
3. CGT Retirement Exemption provides 100% capital gains tax relief on up to $500,000, but only if you meet certain eligibility criteria which may vary with your circumstances.
4. CGT Rollover Relief provides 2 years automatic deferral of capital gains tax.  It applies only if you meet the eligibility criteria and you are using the proceeds from the sale of your business to purchase another business.

Capital Gains Tax Eligibility Rules

The eligibility rules are too complex to go into detail here, but you can read all the details in Chapter 16 of my book ‘Your Business Succession: How To Exit Your Business For Maximum Cash Flow And Profits’ which demonstrates the effects with real life case studies.

To be certain of your eligibility you should seek the advice of a qualified, certified practicing accountant (CPA or CA), and you want to do this well before leaving your business so you can make full use of the available concessions.

More Business Exit profits Keys

Read about the other six Business Exit Profits Keys in detail here.

Secure your own copy of my book ‘Your Business Succession: How To Exit Your Business For Maximum Cash Flow And Profits’ for real life business exit case studies that show you what you want to do to to ensure your cash flow and profits are maximised when you leave your business, through either planned or unplanned circumstances.

To Your Profitable Business Exit,
Leigh Riley

 

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Seven Business Succession P.R.O.F.I.T.S. Keys

All business owners want to exit their business with maximum cash flow and profits. My previous posts and series have mostly focused on identifying the habits and faults that will weaken your business’s potential to generate the cash flow and profits you desire when you leave your business, either through planned or unplanned circumstances.

This post holds out a candle of hope by presenting practical exit strategy steps as I introduce you to my Seven Business Succession P.R.O.F.I.T.S. Keys. My next series of blogs will detail real life case studies in which I will refer frequently to my Succession P.R.O.F.I.T.S. Keys, so this is a timely opportunity to introduce them:

Succession Profit Key 1: Proceed with the End in Mind

• Plan your business and exit sale NOW
• Set your exit goals
• Schedule and program the implementation of your business exit plan
• Formulate policies prevent fraud within your business
• Develop standardized procedures to support your business policies
• Create systems
• Employ the right people

Succession Profit Key 2: Reduce Tax by Choosing the Best Structure

• Seek advice about the right structure to minimize exit taxation from the start
• Plan to leverage capital gains tax relief laws

Succession Profit Key 3: Organise Your Business to Be Free from Debt Commitments

• Understand your obligations with guarantees
• Inform yourself about different types of guarantees
• Discover how to release your business from a guarantee
• Recognise when you can transfer responsibility to another guarantor

Succession Profit Key 4: Flag Potential Funding Solutions for Your Profitable Succession

• Explore your exit strategy options
• Identify various vendor finance arrangements
• Understand Buy-Sell Agreements
• Consider the possibilities of an ESOP (Employee Share Ownership Plan)

Succession Profit Key 5: Identify Ideal Buyers and the Selling Process

• Prepare early to find a buyer
• Learn how to identify a potential buyer
• Formulate your Business Vendor Statement
• Find your potential buyers
• Plan for the transfer
• Buyer – conduct due diligence
• Seller – conduct due diligence
• Negotiate your sale price
• Finalize your contract of sale
• Be prepared for post-sale emotions

Succession Profit Key 6: Take Control of Your Business Sale Price

• Be prepared for unplanned events and exits
• Have a plan to cover disputes within your business that may affect your profitable exit
• Insure against contingencies
• Understand the various types of business insurance that you may need
• Use insurance to protect your business sale price
• Understand how to structure insurance ownership for a smooth and profitable succession

Succession Profit Key 7: Seek Guidance from a Team of Suitably Qualified Succession Specialists

• Understand why you really want a team of succession experts to guide your business exit plan
• Appreciate the role of each specialist with a succession planning team
• Assemble your team succession specialists

To Your Profitable Business Exit,
Leigh Riley

PS
My next post will begin a series of real life business exit case studies. While you wait, 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 (it’s FREE and will take no more that 5 minutes of your time) to find out where your 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 must do to ensure you will overcome any potential situation with P.R.O.F.I.T.S outlined earlier in this article.

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