Every business owner’s dream is to eventually exit their business with maximum cash flow and profit, assuring a comfortable retirement income as a reward for their years of dedicated hard work  To achieve this you will need to maximize the price you receive when exiting if you want to enjoy the comfortable retirement you’ve been hoping for.

Alarming facts about small business owners and retirement savings

Australian statistics reveal that only 5% or retiring business owners will have sufficient retirement savings to be completely financially independent.  In the US the average retiring business person has enough savings to fund approximately 8 years of their retirement, but will on average live 17 to 18 years beyond retirement age.  Facts such as these really bring home the need to focus on succession strategies that will boost your business valuation so you can exit with maximize profits and retirement income.

5 reasons business owners miss out on maximum retirement income

While some business owners will be sufficiently prepared to reap the rewards of years of effort, the reality is that many will fail to maximize their business value in a way that could ease their financial burden during the next phase of their life.  Here are the 5 main reasons why:

1. Strategy Weaknesses involve 8 key areas of failure to have the end in mind when operating their business.  The strategic decisions made in the business do not adequately take into account market demand for the products and services they provide, nor the market conditions in which they operate. They lack a long term customer service focus, and fail to recognize the competitors they’re up against. Two types of competition exist -  competition for customers who use their services, and competition for potential purchasers of their business when they exit.
2. Structural Faults encompass 4 main areas of fault when a business lacks a management culture, and fails to understand the associated tax implications of the ownership structure of a business, particularly when exiting.  To protect yourself against structural faults I can’t emphasize strongly enough that you need to use a team of specialist advisers to collaborate and mitigate the 6 D’s of Succession.
3. Situational Errors takes into account the 6 identifiable situations that, without adequate contingency planning, can impact your business value and move your financial success beyond your control.
4. Sustainability Breakdown comprises the 3 factors that impede effective business continuity and your ability to handover your business whilst receiving full financial benefit for a lifetime of effort.
5. Steering Off Course involves leadership and management challenges and embodies the 4 business succession leadership challenges that you must overcome to ensure your business remains on track for maximum profits and income from enhanced business valuation and sale price when you exit your business.

How ready are you to take on the challenge of overcoming the 5 reasons too many business owners fail to achieve the profitable exit they had hoped for?

Business exit strategies to achieve maximum income for your retirement

1. Take the Business Exit Quiz (2 mins of your time) and 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 want to do to ensure you will not become one of the poor statistics outlined earlier in this article
3. Contact our Business Succession Strategy office to plan your business succession strategy, so we can eliminate the stress of making the right decisions for your best chance of maximizing your business valuation for a profitable exit.

To Your Profitable Succession,

Leigh Riley

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