How can You Boost Your Business Valuation?

This would have to be the most commonly asked question by business owners preparing to exit.  Buyers are scrutinising more carefully than ever before, so you would want to pay attention to this blog series. The factors impacting your business valuation can seem extensive, which is why I’m running a FREE 45 minute Webinar to explain in simple terms on Thursday, 8th September 2011 at 11.30 am.  You can register your place FREE by clicking here.

FREE Webinar to find out How To BOOST Your Business Valuation!

At the FREE Webinar, I’ll be interviewing Business Valuation Guru, Sean Hutchinson live from San Francisco, USA.  I’ve chosen Sean because he is the best I’ve ever met in my 23 years experience.  Sean breaks down the individual factors without the jargon so you can clearly understand what you can do with your business to BOOST its valuation.

When you attend the FREE Webinar, you’ll discover things like:

• the levers you can easily control to maximise your business valuation
• the 6 risk factors that you’ll want to overcome
• the 3 proven methods to increase your business earnings
• the 5 ways to increase your business acquisition attractiveness
• You’ll have the opportunity to learn exactly how much your business is currently worth; plus learn
• One incredibly simple thing you’ll want to do immediately to dramatically boost your business valuation
  Places are seriously limited to this Webinar and this topic is popular, so don’t delay in registering for your place.

We can’t wait to help you BOOST your business valuation!

Here’s to Your Profitable Exit!

Leigh Riley

Next article in series

When a Wall Street capital markets guru from New York directly quotes what I have to say as a Succession Strategist, it’s time to pay attention, sit up and listen.   I can almost hear you thinking “I have no intentions of exiting my business for some time, so I don’t need to worry about exit planning yet”;  Sound familiar?   But Here’s why:

1. Taking notice to understand what a business buyer wants is the key to understanding how to position your business so that it can be sold any time, at a premium price through just about any circumstances.

2. These days, business buyers are getting smarter and already have the end in mind before they buy. That means they want to know you have an exit strategy in place before they buy, because one day they will want to release their capital quickly and easily too.

3. Financiers just aren’t lending on business acquisitions the way they used to before the Global Financial Crisis (GFC).  These days they also want to see there is a clearly defined exit strategy before they’ll loan to buyers wishing to purchase a business.  So you better get your business in order if you plan to sell it some time in future.

This all adds up to one very important point for you.  If you’re not prepared with an exit strategy for your business, you’re virtually not in the game as a possibility to be sold.  If you hope to profit from the business asset you’ve built, an Exit Strategy is a ‘must have’.

You will never know when, why or how you’ll leave your business.  I only know that you will definitely leave it, even if they end up carrying you out in a box.  If you would like to control the circumstances to your benefit and profit, take action today!  Implement your business exit strategy today.

Here’s to Your Profitable Exit Strategy!

Leigh Riley

(You can see the Wall Street Capital markets guru’s blog at  http://weybenjamin.wordpress.com/)

The Future

At a recent presentation given by futurist, Morris Miselowski (Business man, dynamic speaker, entrepreneur, academic, prison chaplain, welfare counsellor, media personality and futurist guru), the audience was astounded by his vision for the future of technology and its effects on business. Most people around me expressed opinions which ranged from dismay and excitement through to some being totally shocked and aghast by the extreme innovation and change about to unfold.

During the presentation, Miselowski outlined just some of the changes that will occur in 2020:

• We will have moved forward 100 technological years
• Average job tenure will be 2.4 years
• 1/4 workers will be working remotely or virtually
• 60% of tasks and jobs performed have not yet been invented
• Our growing healthcare industry will service our ageing population as we strive for quality of life as we routinely live to 100 years of age and beyond
• Expect to see a growing number of Genetic Counsellors, Stem Cell Researches and Custom Implant Organ designers jobs being advertised
• Baby Boomers will be hiring retirement coaches and counsellor, financial advisors and wealth experts to advise them on how to maximise their post work lives.
• Digital professional will be another sought after industry due to online worlds.

Change or Die

Whatever the consensus or feelings, the message was very clear. Either move with the times and shift your business focus to be aligned with the new innovations or you and your business will be out of the race. With 20 years of change already squeezed into the past 2 years, Miselowski cautioned business owners to brace and prepare, for the next 10 years will unfold a whole century of change during that time. Now that’s enough change to surpass author Alvin Toffler’s predictions in the 1970 book titled “Future Shock”.

Future Shock

Whether your perspective to change, tends toward abhorrence or enthusiasm, there is no time to lose. Navigating your business through will require you to sharpen your business skills and optimise your business performance to capitalise through impending change. Couple this reality with surfing through the Tsunami wave of businesses about to change hands, there is no doubt there will be fall out.  Only those that team vision, with the ability to adapt will be in a position to capitalise. You are going to want a robust support team. Business Coaching with the end in mind will likely be one of the only ways you’ll achieve your goals.

Your Business Life Raft is Your Business Succession Support Team

You’ll want to demand an up-to-date succession plan. Necessity dictates your strategy to handle your eventual business exit must include provision for planned and unplanned exit circumstances. But it must also incorporate the array of strategies to unleash operational business opportunities and uncover pitfalls that could impact the lifeline of your business, it’s value and continuity. Ultimately it will affect your family and personal financial security.

Take Action today

Get started by Downloading your free chapters from the ”Your Business Succession” book.

Here’s to your successful future business exit strategy!

Leigh Riley

Situation:

Matt was a sole director of a thriving manufacturing company. His wife Harriet held a senior position in the company; however, she had no sign-off rights to any of the business accounts. When Matt had a stroke and fell unconscious for three months the accounts of the business were inaccessible. Although payments were being received and banked from fulfilled orders, no authorisation was available to make payment of staff wages or to suppliers for new materials.

Implications for their Business:

• Harriet attempted to obtain credit from suppliers and bankers to alleviate the cash flow crisis, however this was not easily reached due to the uncertainty of Matt’s condition and her own ability to secure a credit application
• Some staff were patient and continued to work regardless, however the reality of their own personal cash flow pinch soon resulted in them having to find work for payment
• Rapid consumption of materials meant the company’s ability for production was substantially impeded
• Customers were soon forced to order from competitors due to the lack of production.

Harriet’s application to the courts to gain authorisation to access the business accounts was long, involved, tedious and stressful. The business suffered a significant downturn and took a long time to recover.

Solution:

The matter of Matt and Harriet would never have been a problem had they received the right guidance from their advisors to arrange an enduring power of attorney (EPA). An EPA would’ve allowed a trusted person to authorise payments on Matt’s behalf so that the business could have continued to operate as smoothly as possible, at least from a cash flow perspective.

Here’s To Your Profitable Exit!

Leigh Riley

Previous article in series | Next article in series

To reward myself for my hard earnt new qualification at Chicago, I took a quick trip to New York City where I made some amazing new business contacts and book sales too, but I found myself attracting people that were hungry for guidance about succession planning.

On the roof top of the apartment I rented at Hell’s Kitchen, I struck up a conversation an American executive (I’ll call him Ritchie) who seemed a bit troubled and open to discussion about his business problems.  To protect his privacy I can’t reveal too much detail about the compnay details, but I can tell you we ended up having a 2 hour discussion (virtually a consultation) as he poured out his anguish around the succession of his father.

View from my roof top in NYC

Family Succession Suffering

Ritchie had been his father’s succession plan and since his dad’s departure, the company had entered troubled waters.  Ritchie had a Harvard Education so he felt he was well qualified to make business decisions.  As a teenager, Ritchie had worked in the company performing menial tasks and his father had wisely insisted that Ritchie must gain some experience with a competitor before allowing him to work in a management position with his own firm.

The trouble for Ritchie was that his father did not adequately prepare him to fill his shoes of as the CEO. The succession handover was rapid and this did not provide Ritchie with adequate time to win the respect of the staff. Despite his education and work experience in another company, the staff treated Ritchie as if he was a spoiled boy of priviledge and undermined every decision he ever made.

Ritchie was feeling quite down about the situation which was amplified by the fact that he was going to have to downsize and cut staff to maintain a competitive company position. He felt this decision would further decrease his popularity in the company and that he may never gain the respect of his co-workers. When he sought his father’s advice as a mentor, his dad categorically refused to provide any guidance whatsoever.

Lessons for Family Business Succession

The lesson is significant for all of us with Ritchie’s situation:

• Statistics show that only one third of family businesses handed to the next generation will survive.
• The statistics worsen to one in seven survival for 3rd generational family companies.
• Preparation for family successors needs to start early.
• Education alone is not enough to support the next generation, and experience with another similar company may be of help, but nothing substitutes the gradual responsibility and succession handover so necessary to assist the next generation.
• If your family business is important to you, preparation should commence as early as possible.

Family business can be the most difficult succession plans to arrange because of the family dynamics, which are sometimes too soft on successors and other times to hard on successors. It can make or break and be the difference between successful continuity of a business built over a lifetime. Don’t delay,  take action on your business succession plan as early as possible! Family Business needs just as much time to prepare it’s successors as any business.

Here’s to your Profitable Exit Strategy!

Leigh Riley M Bus, Certified Exit Planning Advisor® (CEPA®), DFP, Cert IV A & WT
Consultant Business Succession Strategist, Author, Speaker, Trainer

You can’t imagine how honoured I was to be asked to write my next book especially for Australian doctors, and after much hard work and research, I am so excited to finally be holding in my hands ‘hot off the printing press’ copies of “Your Practice Succession …. How to Leave a Legacy and Reap the Rewards of a Lifetime of Service to Your Community”.

Your Practice Succession By Leigh Riley

This book has been specifically written for Australian medical General Practitioners (GPs) and covers situations and cases unique to them affecting their succession and exit planning.

Australian GPs provide an extremely important role in maintaining public health to Australian communities.  The continuity of their services is essential to the wellbeing of all of us which is why my passion has been further fueled to assist this essential sector by writing this book.

Of the nearly 60,000 Australian GPs, their average age is 50 years, and many of them are looking at retiring in the next 10 years.  Without a strategy to exit their practice with a continuity program, it could be that community shortages for their valuable services may be inevitable.  It’s in all of our interests to see GPs manage this process effectively.

Topics that are covered in the book

The book:  “Your Practice Succession” is a detailed look at how to prepare a medical practice so that continuity of service can be achieved whilst also enabling GPs to:

• ensure the quality of lifestyle they worked so hard to achieve
• maximise their practice valuation and sale price
• find the right successor
• pre-arrange the sale terms to lock in the arrangements and practice valuation
• safeguard the practice legacy they will leave
• remain in a position of power and security at each phase of the business cycle in their practice
• be released from debt commitments and exit from their practice with financial freedom
• maximise their cashflow
• maximise their practice profits
• exit from their practice with ease.

Find out more

1. If you would like to purchase the book, you can do that here.
2. If you would like a sneak preview of the book, you can download your FREE chapters here.
3. You can also read book reviews here

I’m so proud to have been part of this project, and it doesn’t stop here. I’m on a mission to ensure succession planning becomes a smooth transition for as many business owners that my work can touch.

Here’s to your Profitable Exit Strategy!

Leigh Riley

So if you’ve been signed onto my blogs recently, you’d be aware that I’ve been in the USA learning all that I can about the latest exit planning strategies at an MBA style intensive program run at the University of Chicago. I’m pleased to report that I passed the exam which means I’m now able to put more letters after my name as a qualified CEPA®, but the best bit was that I learned a lot, and I met a lot of great people too. I’ve also been indoctinated into the Institute of Exit Planners.

Surprisingly, there are not a lot of people in the world specialising in Succession Planning, and at the risk of sounding a bit precious, I’m kind of one of a very unique group in the world. In Australia, that group is especially unique and tiny, because there are only four Aussies with this qualification, and three of them were at the training with me. What does that mean for you? Well it’s something to be aware of when you seek out your succession support, because there may be some people posing as professionals in the area of succession planning, but if they aren’t formally qualified, you’d have to wonder how good their services and advice will be to you.

There is a lot to consider with your business exit plan, and the statistics are not good for Aussies, who have so often failed to plan for the important succession event that will inevitably happen in their business.

If you need to know what to do to get started, download some free chapters from my book: Your Business Succession and sign up for my regular blog to receive lots of helpful and handy business exit planning tips.

Here’s to your Profitable Exit Strategy!

Leigh Riley M Bus, Certified Exit Planning Advisor® (CEPA®), DFP, Cert IV A & WT
Consultant Business Succession Strategist, Author, Speaker, Trainer

I think it is bad enough to close your Business doors because you can’t sell, but consider this GPs story.

Dr Francis had served his community in a Practice established over 30 years.  With no business operational skills learned throughout Medical School, Dr Francis was like many of his peers: a very good doctor concerned for his patient’s welfare, with little interest in the business matters of his private Practice.  Honourable as that may seem, it did not serve him well.  Nor did it serve his loyal staff or the patients he’d so diligently cared for over 3 decades.  When he was eventually forced to exit due to ill health, and a new owner could not be found for his Practice, his only option was to close his doors. 

This was a disaster with a threefold effect:

1. His staff were adversely affected being suddenly without jobs

2. His community was impacted heavily due to loss of his valuable services

3.  His personal finances were hit hard, because not only did he not receive any financial consideration for his lifetime of efforts, but he had to meet an obligation owed to staff for long service leave payments and other entitlements.  The insult to injury was that it meant he must pay out money to leave his Practice.

Avoid a similar situation

• Start by educating yourself about the options you have.  In the books ” Your Business Succession”  and “Your Practice Succession” you can find all the practical tips to positioning your business on a course of strength and success through any of the identifiable succession triggers.  
• Sign up for the Live FREE Webinar to learn more about what you can do to successfully exit from your business, despite the circumstances. You can do this by emailing your interest to my office at support@ybsprofits.com  or   call 1300 499 255 or (03) 9584 5099 to book your place. The session will be on 21 June 2011 and it will run in two timeslots , 2pm or 7pm for 45 minutes.

Here’s to Your Profitable Exit!

Leigh Riley

Businesses: 6% Will Close Without Selling (ATO)

In Australia, that equates to about 120,000 businesses a year that do not sell, with owners simply closing their doors.  Alarmingly, this statistic is rising due to the large amount of businesses that are not adequately prepared for the issues they will face when the time comes to leave.  They haven’t built their business as a valuable asset with a Business Selling Strategy.  Escaping these statistics is easier than you may think.

75% Have No Succession Plan

The 3 top reasons business owners like yourself state as why they haven’t implemented a formal exit strategy is because

• they’re so busy working ‘in’ their business, they’ve failed to take stock and spend time working ‘on’ their business;
• they think it’s too hard and allow seemingly more pressing everyday tasks to take priority, ultimately losing focus of the big picture for their business with a business selling strategy;
• they don’t see the immediate need, particularly if they feel it will be some years before they wish to retire from their business

The Number of Business Owner’s that will Leave Due to Unplanned Circumstances is 51%

Business owners always believe they will choose the time when they will leave…..but in doing so, they lose control when they overlook the 6 Succession Triggers and fail to understand that only 2 of these can be controlled.  The other 4 exit triggers will adversely affect them, impacting heavily on their financial outcome when they exit from their business.  It doesn’t have to be that way.

How Do You Escape and Overcome the Succession Statistics?

I can’t cover all the ways for you here in a short blog post, but I can share a lot more techniques in the books, and also in a FREE Webinar.  If you are serious about your business direction, have a goal for the way you see it developing as a valuable asset that you can one day sell, you can’t afford to miss the opportunity.  Sign up for the FREE Webinar to learn how! You can do this by emailing your interest to my office at support@ybsprofits.com  or  call 1300 499 225 or (03) 9584 5099 to book your place. The session will be on 21 June 2011 and they will run in two timeslots, 2pm or 7pm for 45 minutes each.

Here’s to Your Profitable Exit Strategy!

Leigh Riley

I’m blogging to you from New York City and about to reveal the last 3 important reasons to think like a buyer when you sell your business. These are the points I emphasized to the editor of Inc Magazine (USA) when I was asked to list the things a buyer should look for when buying a business (these follow on from the previous two blogs)

Scenes form New York City: Columbus Circle in Manhattan

8.Systems and Processes

Buyers will want to check out the way your business operates as this will provide an indication of efficiencies. If it is a turnkey operation that anyone can run; and there are established, up to date training manuals, and all staff clear about their role in the business, buyers will pay a premium for that, so it makes sense to ensure you provide this if you are to profit the way you had hoped when you leave your business. If not, be prepared to have a buyer beat you down on price.

9.Leases, Plant, Equipment and; Machinery

Terms and life of leases of your business operation are essential so buyers will scrutinize these carefully. You want to make sure there are reasonable and long term leases in place to protect the continuity of the business operation. Operational equipment must be in good order, or else a buyer will be turned off believing they may be burdened with the need to inject immediate capital to upgrade for future efficiency of the business. Tired equipment, plant and machinery can be a massive drain on profitability, so sort it out before you sell, otherwise you can expect this to be reasoning to beat down your business price.

10.Exit Planning Prospects for the future

I know you’re thinking “why would it be important to a buyer to consider their exit strategy on a business they’re about to buy and probably not planning on leaving for some time?” It’s good question, but definitely don’t discount it because buyers today are thinking to start with the end in mind. That’s because the informed buyers knows one day they will want to also sell for a maximum price. The informed buyer also knows they may not always choose when they leave because unplanned events such as dispute, divorce, disability and death are a lot more common than is thought. You can help by thinking about the exit options for them, and one way to demonstrate this is to have your own exit strategy clearly mapped out. Financiers are now also asking for this information before they lend money on the acquisitions, so it really is in your interests to have this sorted out before you sell. On top of that, it will help you because what if circumstances force you out unexpectedly? Is this a business you are going to be able to off load quickly if you need to, and at a price that is satisfactory to you. If it’s a business that requires special interest or skills, you better start thinking about it now, before you sell, so you don’t get caught out and left strapped for cash.

You can read a lot more about these points I make in the book “Your Business Succession, how to enter, execute and exit your business for maximum cash flow and profit”

Here’s to Your Profitable Business Exit!

Leigh Riley

Previous article in series |