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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The headlines read ‘Earth and Venus may collide’!  If that is your latest reason not to take action on growing your business value and arranging your business exit plan, think again!

There is a one-in-2500 chance of Earth and Venus colliding.  But there is a 100% chance of you leaving your business one day… whether you choose to or not, it’s inevitable, so isn’t it time to face facts, stop making excuses and start on your business succession plan?

Leaving your business is lot less scary than the thought of planet Earth crashing into Venus.  You and I both know that if you’re the type to look for reasons not to get things done, there’ll be another reason waiting in the wings to justify your inaction.  If this possible threat is just a distraction from reality for you, then wake up and start on your business exit plan now.

Taking simple action will add value to your business, because you’ll present it in its best light, making it more appealing to potential to buyers.  When you are preparing to sell your car – you clean, polish and service it, and you obtain a mechanic’s report to verify its reliability.  These simple actions certainly add value to the car because buyers will pay more for the beautifully presented vehicle in great mechanical condition.

Practical business exit plan steps you can take right now

Similarly with your business, you need it to be in top condition to maximize its value.  Preparing to exit your business is similar, but it takes a bit more time and effort. Here are five practical steps you can take right away to start the process of maximizing your business value:

1. Keep your premises clean and tidy
2. Maintain your equipment, stock and tools in good order
3. Document all your systems
4. Ensure your staff are well trained in the day to day processes of your business
5. Verify the profitability of your business with an accountant’s financial reports for at least 2 years

FREE help to start on your business exit plan now

Take the FREE business succession readiness assessment that I designed to support you and readers of my acclaimed book ‘Your Business Succession’ How To Enter, Execute And Exit Your Business For Maximum Cash Flow And Profit.

You need to invest only 3 minutes of your time to complete the free assessment…. And you’ll receive a customized ‘to do list’ of the main actions you want to take to get started on your business succession plan. You have nothing to lose and much to gain … so take the quiz now

Take the quiz

How well prepared are you for planned or unplanned business succession? Share your story or your experience with the quiz on the comments box below.

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