Overcoming Business Succession Strategy Weaknesses

My previous post consisted of a case study about how to eliminate or reduce tax payable when you exit your business, and in an earlier a post I identified the 8 Exit Strategy Weaknesses that you want to overcome for a more profitable exit outcome.

Being in business requires you to maintain updated knowledge of a vast range of issues, and the economic factors impacting your business are just as important as anything else I’ve covered in this blog series.

Understanding the trends that will develop and change your business as a result of economic factors will be crucial for the longevity and continued viability of your business.

On Friday I was speaking with a dentist who was busy factoring in demographic population shifts and social change to his business decisions.  He was thinking about how these factors that he had identified would affect his Dental Practice earnings over the next 10 years.  Cleverly, he is actively planning his business for the shift in demand, to ensure his Practice continues to remain relevant to the market and profitable well into the future.

Who would have thought that tooth repairs would be affected by changes to the economy?  But dentistry is a business like any other, and this very smart dentist is fully across that fact.

Here’s an economic reality that will affect every business, no matter what your industry or business focus may be.  The Global Financial Crisis (GFC) has had a long lasting effect in ways you may not have imagined.  Even if your business has grown and continued to prosper through this period, it is very likely it will bite you when you go to sell – unless you’ve put in place a healthy exit strategy.

How To Can the GFC Effect Your Business Exit?

If you’re expecting to sell your valuable business asset, start thinking about the price that someone will need to pay to buy.  If you’re like many business owners I’ve met, you may have built an asset that is not easily afforded without the buyer borrowing to purchase.

Now here comes the GFC crunch point: all financial institutions are scrutinizing very carefully the money they lend for business purchases since the GFC.  They will only lend to people who have substantial assets to back the loan, and in the absence of that, financial institutions require a very healthy business proposition with a high level of business asset backing and robust sustainable and proven cash flow.

That reality is certainly applying pressure to business owners who hope to make an easy sale in the immediate or medium term.  The situation isn’t likely to improve for some time, so it wouldn’t be wise to live in hope that it will pass soon.

How can you prepare to sell your business for the price you want?

You want to start preparing now!

• Boost your revenue and continue to show a healthy profit.
• Tidy up your business financial status.
• Identify the trends for your industry and start leading your business into the long term sweet spots of revenue earning.
• Develop a strategy that will position your business earnings for the long term.
• Think outside the square about who will buy your business, and how you can position your buyer to afford your business so you can exit with maximum cash flow and all the profits you deserve for the lifetime of effort you’ve invested in building your business.
• Gather a team of succession experts to assist you in locking in your strategy, and make sure they’re working collaboratively for your benefit, so that you receive the best possible solution that will overcome all the barriers we’ve identified.

If you need a quick summary of the aspects of your business that will get you started on preparing your business succession, you can take the Business Exit Quiz. It’s FREE, and you will receive a customized analysis of your exit readiness with a list of items that you need to work on to maximize your business sale price.  The 10 questions usually take 2-3 minutes to complete.  So what are you waiting for?  Click here now to take the Business Exit Quiz.

You could also read the book ‘Your Business Succession‘ for a comprehensive commentary on how to prepare your business for maximum cash flow and profit at your exit.  Order your copy of “Your Business Succession” online.

To Your Profitable Business Exit!

Leigh Riley

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