Family Business Exit Strategies

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During the last two posts of this series, I introduced the concept of different business categories and how each of these will be affected differently when establishing Your Business Succession Plan. 

Business Succession Planning is relevant for every business owner because one day, you will either want to or have to, exit your business. How this is to occur will depend on the type of business you have and the type of outcome you are looking for.

Despite the type of business you have, you’ll want to maximise the cash flow and profits you receive when you exit, whether by planned or unplanned circumstances.  This will be very important if you want the sales proceeds to fund the next phase of your life, or to assist you and your family to maintain a decent living standard after you exit your business.

During the previous posts I discussed situations involving the Sole Proprietor and the Medium-sized Business about how to maximise their outcome when they exit their business. In this final part of the series, I will discuss the succession plan of attack for the family business owner who wants to pass the business on to the next generation.

Typically the family business owner can be the most difficult succession plan to devise, because it not only involves the business value, money and mode of operation in succession discussions, but also the family and its dynamics. 

If you are a family business owner, it is especially challenging for you because, not only do you need to build it in a manner that will make it a valuable asset to set you up comfortably for the next phase of your life, but it must also help you to pass on and assist the next generation (your family) to build sufficient capital and skills to buy and run the business.

However, even If you are like some family business cases, where you have sufficient additional assets to consider gifting the business asset to family members when you exit your your business, careful succession planning is still essential. 

There are substantial tax implications for you when you gift your business to family members, so don’t overlook the opportunity to gain specialist succession advice well before exiting. 

Your family business is just as vulnerable when you fail to take the action to formalise an agreement to overcome the six identifiable succession triggers (Dispute, Death, Disability, Divorce, Desire for change, Decision to Retire). There are plenty of failed family businesses because they rested on the thought that as a family they’d be ok and work out any succession planning issues when the time came.  If anything, the emotion within a family can steer a business in an un-business like manner.  Don’t become the next statistic.

Do you want to know how prepared you are to Exit from your Business?

Take the FREE Business Exit Quiz to receive your customised report. It takes about 2-3 minutes to complete.

You can also Download 3 FREE chapters from the popular book, “Your Business Succession”.

If you haven’t engaged a Business Succession Strategy Team working together for your benefit
it’s time to do so. Click here to Book your FREE 15 minute consultation with the Exit Experts Succession Strategist (only for subscribers of this blog, so please log on to subscribe)

Here’s to your profitable Business Succession!

Leigh Riley

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Medium Business exit strategies

(Read on for your Three FREE offers with this blog post)

In the last post, I introduced the concept of different business categories and how each of these will be affected differently when establishing Your Business Succession Plan. 

Business Succession Planning is relevant for every business owner because one day, you will either want to or have to, exit your business. How this will occur will depend on the type of business you have and the type of outcome you are looking for.

Despite the type of business you have, you’ll want to maximise the cash flow and profits you receive when you exit, whether by planned or unplanned circumstances, particularly if you want the sales proceeds to fund the next phase of your life, or to assist your family to maintain their livelihood.

During the previous post I discussed Category One being the Sole Proprietor and how to maximise their outcome when they exit their business. 

In this session, I’ll concentrate on the second of the business types. If your business fits into Category Two, you’ll be the type of business owner that puts a large portion of your time and money back into your business.

Your goal is to build the value of your business in a manner, that, by the time you exit from it, will have grown to quite a valuable asset. More likely to be a medium sized business, your business is not reliant upon your services within it, because you’ve developed a team of people to fulfil all the tasks that keep it operational,and if you haven’t already, you are more likely to be developing a management team to oversee it.

Your succession plan will be different because your most ideal successor is probably already working in your team.  Usually they will be familiar with the business clients, systems and processes, products, services and suppliers, so this part of the succession plan becomes a lesser issue when passing on the baton.  

Your succession strategy can encompass many more options than that of the Sole Proprietor, but is no less vulnerable if you don’t take the action to formalise an agreement that overcome the six identifiable succession triggers (Dispute, Death, Disability, Divorce, Desire for change, Decision to Retire).

Due to the size of the valuable business asset you have built, funding the eventual buy-out will usually be a larger problem to overcome.  As a business owner wanting to extract your business wealth in cash, you will need to think outside the square, and a lot earlier, to ensure your potential successor has the financial capacity to pay you your rightful entitlements. This has become more of a problem in a market place that is inundated with tough financiers who severely scrutinize loans on business transactions and acquisitions.

Quite often business owners in this category are aged between 40 to early 50s, and don’t have a lot of personal assets, but tend to have more debt commitments because all available financial resources have been poured back into the business.  If you can relate to this scenario, it makes it more crucial for you to lock in a business succession strategy, that will release you of your debt commitments and protect your interests in a way that will maximise your financial outcome.

Do you want to know how prepared you are to Exit from your Business?

Take the FREE Business Exit Quiz to receive your customised report. It takes about 2-3 minutes to complete.

You can also Download 3 free chapters from the popular book, “Your Business Succession”.

If you haven’t engaged a Business Succession Strategy Team working together for your benefit it’s time to do so. Click here to Book your FREE 15 minute consultation with the Exit Experts Succession Strategist

In the next blog, I will discuss the third category type for succession planning which is the Family Business.

Here’s to your profitable Business Succession!

Leigh Riley

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Succession Planning is relevant for every business owner because one day, you will either want to or have to, exit your business.

It is normal for you to hope to sell your business when you exit, and the chances are, you will need the sales proceeds to fund the next phase of your life, or to assist your family in maintaining their livelihood.

How this will occur will depend on the type of business you have. In my experience there are generally three main business categories, and each will require a different approach to their succession planning. This blog will be written in three parts to focus on each of the three main categories, with the first of these being

Category One: Sole Proprietor.

If you fit into the first category, you will have a business that relies on your sole capabilities. For example, if you are a consultant or independent professional (such as a lawyer, accountant, doctor, etc), your business is likely to be the mechanism to sell your expertise and generate your income.

In this situation, you are likely to have a client base that can be sold when the time comes to leave, however the business book alone may not generate the sort of financial outcome you had hoped for.  This could leave you short of cash to fund your retirement, or leave your family with a lowered living standard if you leave under stressed circumstances.

If you are to improve your financial prospects when you leave your business you will want to build an asset with a reliable recurring revenue stream that is not entirely reliant upon you (see the concept of building your
business to the “Three Dimensional Zone of Value” discussed in the book “Your Business Succession” because this will yield the most profitable outcome for you when you exit. 

If you aren’t sure how to achieve this, you may want to engage a business succession strategy team to assist you (book your free 15 minute consultation), so you can maximise the cash flow and profits you receive when you exit your business.

Building your business value, is only part of the succession plan you want to build, because you will also want to identify your successor to establish agreed terms that secure your position through both planned and unplanned circumstances. 

If you are to profit the way you had hoped, your successor will need time to  be introduced to your clients, staff, business processes, suppliers etc, so the earlier you can set up the arrangement, the better your outcome will be.  Successors who have been given time to establish relationships with these key areas of your business will usually be prepared to pay a higher price for your business because it is more likely the clients will stay on.

If you are not prepared to take the steps to build your business succession plan in this way, you will want to ensure you are building a nest-egg aside from your business to ensure you achieve the financial security you’d always wished for.  You may want to engage a financial planner to assist you in building an asset base away from your business.

Discover how prepared you are to exit from your business?

Take the FREE Business Exit Quiz to receive your customised report. It takes about 2-3 minutes to complete.

You can also Download three FREE chapters of the books.

If you haven’t engaged a Business Succession Strategy Team working together for your benefit it’s time to do so. Click here to Book your FREE 15 minute consultation with the Exit Experts Succession Strategist (only for subscribers of this blog, so please log on to subscribe)

In the next post, I will discuss the second category type for succession planning.

Here’s to your profitable Business Succession!

Leigh Riley

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Prescription for business succession disaster!

Bill and Ben were equal-share directors of a profitable medical supplies distribution business for ten years. They estimated the business value at around one million dollars. When Ben suddenly died in a car accident, Bill thought he would automatically borrow to buy out Ben’s shares from Ben’s beneficiaries, but he faced a number of unexpected problems.

• Problem 1: Ben’s estate attorney arranged a business valuation to determine the value of Ben’s ownership for distribution to his estate, revealing that the business value had grown to $1.5 million. For Bill to buy Ben’s shares, he would need to borrow $750,000.

• Problem 2: Although the business was going well (with both directors operating it), Bill struggled to find adequate finance (the maximum he could borrow was $350,000) because his personal debt commitments were significant and he had forgotten the business had previously provided personal guarantee security against a mortgage for Ben’s family home.

• Problem 3: Ben’s wife, who didn’t work, needed the money from the business to pay off the mortgage and meet other family expenses, so was applying legal pressure to Bill to do something to release some cash.

• Problem 4: Bill was extremely traumatised by the loss of his long-term working partner and the resulting financial challenges. The situation took months to resolve and affected the business operations in a way that negatively impacted sales fulfillment, which was predominantly Ben’s area of strength in the business. Customers became disgruntled and began purchasing from competitors, which in turn affected sales, cash flow and ultimately the business value.

• Problem 5: Ben’s eldest son Tom had been working in the business as a storeman, and felt he was entitled to move into Ben’s role automatically as a beneficiary to the estate. Although Bill had tolerated Tom working under Ben’s charge while he was alive, Bill could not entertain the idea of working directly with Tom because he was too inexperienced. On top of that, Bill had always found Tom to be spoiled, immature and irresponsible, so considered him to be an undesirable working partner or co¬owner.

• Problem 6: Bill was desperate to find another equity partner, but aside from Tom, no candidates presented. Bill was not able to form an agreeable arrangement with Ben’s widow, who was represented by strong legal counsel. The situation had become quite acrimonious and Bill was forced to sell the business. The business sold 18 months later for $1.1 million, some $400,000 less than its valuation immediately after Ben’s death.

A poor succession outcome for Bill

Bill had lost a large part of his life’s work through his inability to arrange capital funding to take full ownership of the business when Ben died. This was a heartbreaking loss from which he took years to recover.

Although Bill and Ben were excellent business people in so many ways, they made an enormous error of judgement by failing to plan certain aspects of their business that were essential to ongoing good management. During all their previous business planning sessions, they had never discussed a succession plan or taken the simple steps that could have easily prevented the stress and heartache that Bill, Ben’s widow, and Tom all endured.

How to prevent the forced sale of your business

1. Implement thorough succession planning measures, such as forming an agreement that contains funding mechanisms to release owners from debt and guarantee commitments, to ensure that all owners remain in a strong position to negotiate a sale no matter what the circumstances.
2. Educate yourself - read in detail about what Bill and Ben could have done to prevent this situation in the solution suggestions in Part 5 of my book “Your Business Succession: How To Exit Your Business With Maximum Cash Flow & Profits”
3. Conduct a FREE self-assessment of your readiness to exit your business profitably under any circumstances at www.BusinessExitQuiz.com

To Your Profitable Business Exit,
Leigh Riley

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Why you want to properly value your medical practice

Dr Dave, a GP nearing retirement, offered Dr Peta, a talented younger GP, a 20% stake in his Practice, as a retention strategy, and also as part of her remuneration package. They agreed verbally to a loose and informal buyout strategy, whereby Dr Peta would acquire the remaining 80% over four years, as part of the incentive bonus remuneration package on which both doctors had agreed.

The Practice valuation was based on Dr Dave’s own estimations, because both parties believed that it was not worth paying the accounting fee for a formal valuation.

Later, Dr Peta married, and soon afterward tragically died in an accident. Her new husband requested a formal valuation of the Practice and made demands on Dr Dave for payment to the value of his inherited shares.

The formal practice valuation was higher than Dr Dave had estimated, and because the shares had been offered as incentive (rather than being purchased) under a verbal agreement, Dr Dave didn’t believe that he should pay the spouse anything. Unfortunately the legal opinion disagreed, and Dr Dave had to pay up. Without available cash on hand, Dr Dave was forced to borrow the funds in a difficult borrowing environment, which required him to delay his retirement significantly, until the debt was repaid.

What’s more, finding an alternative potential buyer was difficult due to the lack of available candidates at the time. The costs involved in resolving the legal dispute far outweighed any initial succession set-up costs he would have incurred. If only he had sought professional advice from the beginning!

This case could easily have been an example of a viable succession strategy for the GP; instead it demonstrates a series of common succession strategy errors, all of which would have been avoided with appropriate professional guidance.

What Dr Dave could have done to prevent his practice succession nightmare

Dr Dave would have needed to include a number of vital measures:

• Invest in qualified professional advice to ensure the strategy would work for both parties.
• Organise a formal valuation of the Practice to determine the true basis price as part of the terms.
• Formalise the strategy with specified terms, in a legally written Buy-sell agreement, so that there could be no misunderstanding regarding each party’s rights, and so that loved ones would automatically benefit without distress or legal argument.
• Arrange insurance to meet the contingent aspects; this would have provided instant capital to pay out the deceased party’s spouse (thereby requiring no debt funding), and may also have allowed Dr Dave to retire fully funded, without the need to delay his retirement.
• Professional advice from exit experts would have ensured that the strategy would provide the most advantageous structure from a tax perspective.

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

Take the FREE Business Exit Quiz and and find out!

To Your Profitable Practice Exit,
Leigh Riley

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Poorly Communicated Succession Plans Can Lead To Business Failure

One of the biggest mistakes made by business owners when it comes to succession planning is making all the decisions alone. Often the most difficult decision is how to a divide a business in a family situation, particularly if the main asset you hold is your business and you have one or more children competing to eventually take control.

As the business owner, it is more than likely your right to ultimately distribute and hand over the business in the way that you feel is most appropriate.

However, if an amicable outcome with business continuity and harmonious relationships are important to you, then you would be wise to include all the family members involved and communicate your intentions to gain feedback and acceptance from the main stakeholders. If you fail to communicate your intentions accurately with all involved, the outcome could spell disaster for the business, resulting in financial disappointment and relationship breakdown for all the interested parties.

CASE STUDY – Family disputes after succession cause business closure without a sale

Business owner Stuart was the father of three children. His eldest child, Tim, had worked in the business all his life and had contributed significantly to building the business value. When Stuart died, leaving an equal share of the business to each of his three children, Tim felt short-changed because he had made the business his life’s work.

The business had insufficient borrowing capacity and Tim could not afford to buy out his siblings, who insisted on liquidating the asset, forcing the sale of the business. Tim contested the will, insisting he deserved more than one-third.

Unfortunately, the business remained closed during the lengthy and costly lawsuit that continued for two years, resulting is irreconcilable family breakdown and decline in the business value due to loss of income and clientele.

To add insult to injury, an opportunistic competitor established a similar business across the road, effectively gaining all of the business clientele.

How to prevent family disputes after succession from destroying your legacy

This situation could have been prevented and all parties’ interests could have been protected if only Stuart had chosen to communicate with Tim about his intention of leaving equal shares in the business to each of his children. Tim could have expressed his passion for the business and his desire to one day own the business, which would have provided the opportunity for them both  to seek advice about how to structure it so that Tim could take over without his siblings missing out on their share of the inheritance.

The simple solution to this problem would involve Tim entering an agreement with his father to buy out the business upon certain succession triggers. The agreement could be arranged to provide Tim with full funding by using insurance and vendor finance terms to facilitate the transaction. Full details of the strategy and options for this case study are revealed in Part 5 of my book ‘Your Business Succession: How To Exit Your Business With Maximum Cash Flow and Profits.”

Revealing your succession intentions is only one part of the communication required within a business to ensure every stakeholder understands their rights and responsibilities. Communicating the exit terms from the very start of your business relationship is essential for a fair outcome during times of internal disputes, as you’ll discover in the next case study about situational errors in succession plans.

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

51% of small business owners in Australia exit before retirement age  in unplanned circumstances. Take the FREE business exit quiz to see how prepared you are to prevent this happening to your business and your family.

To Your Profitable Business Exit,
Leigh Riley

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Infighting and Disputes Devalue a Thriving Business

When you decide to join forces with colleagues in a business, your natural response is to focus on all the positives of the union.

The last thing you are likely to have on your mind is the possibility of an acrimonious separation that could result in you losing part or all of the capital you contributed to the business, as well as being denied the value that your efforts contributed.

Let’s face it – if you thought that was a possibility, you would never enter a joint venture, but the reality is that some business relationships do sour, and the worst time to attempt to negotiate fair exit terms is during a dispute.

CASE STUDY – Effects of infighting and disputes among business owners

The situational errors made by business partners Andy, Phyllis and Johanna in a professional services firm caused a tragic loss  of value due to infighting and disputes which resulted in one partner being forced out without her rightful financial entitlements.

A thriving professional services firm’s three partners began to argue among themselves about the business operations and workload. Two of the partners, Andy and Phyllis, felt they were working harder than the other, Johanna, although all were earning the same pay.

The arguments escalated into a dispute when Andy and Phyllis, who were romantically involved, ganged up on Johanna, leading to her unplanned, forced exit. With no formal agreement about succession terms in place, an unreasonable exit payment was offered to Johanna.

Johanna engaged legal representation and a costly legal battle ensued regarding equity value. The outcome was less-than-fair terms for the departing partner after costs. With all parties focused on the dispute, attention was diverted from the business operations. The result was a sizable decline in the practice value.

What’s more, during this disruptive period, some staff left, while others took advantage by slackening off. Many clients left the firm to engage alternative options due to the poor service they were receiving, some following departing staff members, effectively destroying the original value of the firm.

Cases like this demonstrate why you want to start your business relationships with the end in view, and why you must negotiate the exit terms while all partners are in a positive frame of mind.

Why Succession Solutions MUST Be Planned At The START of a Business Partnership

This situation could have been resolved easily had they started their partnership with a succession plan agreement. The conditions of the agreement would need to include the full financial terms applicable to any partner of the firm exiting under each of the possible succession triggers identified in Chapter 2 of the book, “Your Business Succession”. This would have allowed Johanna to decide whether or not the terms of exit suited her before she committed to entering the business. She would have had the ability to negotiate more favorable terms from the start, which would have saved her from the stress, legal battle and financial loss that eventuated.

You can read in detail the actual strategy outlined for the agreement in Part 5 of “Your Business Succession”.

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

Take the FREE Business Exit Quiz and find out!

To Your Profitable Business Exit,
Leigh Riley

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January is almost over and by now you have probably had enough time to think about what you plan to achieve for your business in 2011.

Historical example of a powerful family’s succession plan

If you’re anything like I am, you’ve mixed your business planning time in amongst some recreation time, and been to some movies.  If you haven’t seen it already, I can highly recommend you check out “The King’s Speech” starring Colin Firth and Geoffry Rush.  It’s an unbelievable, but true story of unexpected succession thrusting the stuttering, ill prepared Prince Albert to the forefront of the British Monarchy after his brother Edward VIII abdicated, having served less than 11 months as King.

Poor Albert was forced to assume the role of King George VI (they changed his name from Albert because it is a German name that was thought to be unpopular given the political rise of Hitler).  The underconfident Prince went into overdrive attempting to prepare himself for the business of being King of England and to fill the large shoes his father George V had once worn.  He had many fears to overcome, particularly with his speech delivery; and given his life long stuttering problem, he definitely didn’t feel up to the task.  But his royal duty was calling so he had little choice.  Undoubtedly it caused him a great deal of distress, but fortunately despite his lack of confidence, he did in fact have the qualities that enabled him to become the great King George VI.    The outcome could have been quite different had Albert not had the ability to rise to the occasion.

I have to wonder how many of you may be leaving yourselves open to potential failure due to a poor choice or no choice or strategy for your business succession.  Just how well prepared are your successors to fill your shoes should you suddenly leave your business.  What kind of solutions have you put in place to ensure the continuity of your business along with assuring your own financial success?  Will your legacy live on beyond your reign?

Even if you have your succession plan in place, how well prepared are you and your business to cope with the unexpected and unplanned events that may force a space at the helm of your business such as the one experienced by the royal family in this story during 1936?  Have you chosen your successor by virtue of a formula such as ‘leave it to the eldest child’ as is the practice of the British Royal family?  Or have you taken the time consider who may be best prepared to takeover for the better of the business?

Succession planning should position you and your family for the best financial outcome through any circumstances.

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

You can learn a lot more about the essential attributes of a successful succession plan in my book “Your Business Succession“.  But before you invest in your business future, you may like to assess just how well positioned you are by taking the FREE customised assessment I’ve designed especially for you to determine how well prepared you are to exit your business.  Simply go to www.BusinessExitQuiz.com The quiz takes about 3 minutes to complete and then I will provide you with feedback about the areas you need to focus on to ensure your most profitable outcome when you leave your business.

If you would like to know more, you can email me your questions or be brave and call me direct … I’ m expecting your call on 1300 499 225.

Here’s to your Profitable Business Succession!
Leigh Riley

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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 previous post in this series revealed how transparent Terms Of Sale can seal the deal for a favourable business exit
and this post outlines a powerful case study about the impact on final profits of tax payable by an Australian company at the time of business succession.

How To Eliminate Or Reduce Tax Payable When You Exit Your Business – Case Study

In March 1994 the four Cabernet brothers inherited from their father a family-owned Australian wine company valued at $5 million. They inherited equal shares of 25% each at a cost base of $1.25 million each, made up of:

• Active Asset Land Value $3.5 million
• Plant and Equipment $1.32 million
• Goodwill $180,000 [Turnover $720,000]

In November 2008, the Cabernet family decided to exit the wine business and sold the company shares, which had grown in value to $16 million (i.e. $4 million each), comprising:

• Active Asset Land Value $12.0 million
• Plant and Equipment $3.5 million
• Goodwill $500,000  [Turnover $2 million]

The disposal effectively resulted in realised capital gains for each brother of $2,750,000.

Total Australian tax was calculated (after making use of available exemptions) and due on the sale proceeds for each brother. The amount of tax shared among them was $337,500 (i.e. $84,375 per brother, not including Medicare levy, which at 1.5% would be $41,250 each, assuming they all have private health insurance).
NB. This example uses the tax rates that applied in the year the business was sold (i.e. Australian tax rates as at 2008/2009).

If the Cabernet brothers had sought specialist advice and implemented proper tax planning strategies well before the sale, they could have reduced their combined tax liability by $247,500 to only $90,000 (not including Medicare levy). That’s a reduction in tax of $61,875 each, which could have been achieved without changing any of the circumstances in the existing scenario.

Eliminating Tax by Seeking Pre-Business Exit Tax Advice

Had the Cabernet family taken prior advice and been prepared to make just a few slight changes to the scenario before signing the contract of sale, they could have actually reduced their tax liability to nil, which would have saved them $337,500 in tax.

How is this possible?

Tax laws are complex, so your options will vary depending on where in the world your business is located. To fully understand what the Cabernets could have done to achieve a better outcome, you’ll need to understand the rules that apply in Australia. Specialist tax advisers have spent years understanding how the rules can be used to your benefit, so your safer option is always to obtain advice from an expert in capital gains tax law and business transfer in your country.

You will find more specific information on how to reduce tax by choosing the best structure in Chapter 16 of my book, Your Business Succession: How To Exit Your Business For Maximum Cash Flow And Profit with specific solutions to the Cabernet family’s  business exit problem.

How 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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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 which may cause a disappointing business succession outcome for you.

The previous post in this series revealed why you want to move from the Unilateral Zone to the Three Dimensional Zone Of Value™ in your business to boost your business exit cash flow and profits and this post demonstrates that transparent terms of sale can seal the deal for a favorable business exit.

How Transparent Terms Of Sale Can Seal The Deal For A Favorable Business Exit – Case Study

Chemical manufacturer, Christopher, wanted to retire from his business, which produced manufactured products and cleaning goods using protected formulas.

He easily attracted an interested buyer due to the financial data he was able to provide. However, the contract sale terms were terminated when it became clear to the buyer that the chemical formulas were not clearly documented, and Christopher was not willing to provide these in a written format with a manual.

The buyer lost faith due to the seller’s lack of transparency, and abandoned the sale.

This was a wake up call for Christopher and he finally agreed to provide the documentation, but the buyer no longer wished to proceed with the transaction, because he now believed that Christopher was less than honorable.

As you read this case study, it may seem very obvious to you how this problem could have been avoided. However, as was the case with Christopher, too many business owners are unaware of how their actions (or lack of action) can affect their business exit until it is too late.

So I can’t emphasize strongly enough how important it is for you to be transparent and to document clearly exactly what you intend to include in the sale of your business as you prepare to exit.

How to document your business processes is discussed in more detail in my book, Your Business Succession: How To Exit Your Business For Maximum Cash Flow And Profit with specific solutions to Christopher’s business exit problem in Part 5.

How well prepared are you to exit your business with maximum cash flow and profits? Take the FREE Business Exit Quiz (only 5 minutes) and find out exactly where your business succession strategy may be letting you down, and how to improve your chances of exiting your business for maximum profits and cash flow.

To Your Profitable Business Exit,
Leigh Riley

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