The first of the Strategy Weaknesses and reasons why too many business owners fail to exit their business profitably has to do with a business owners inability to comprehend the impact of the Laws of Supply and Demand.
One of the biggest problems you will face when the time comes to leave your business is the number of competing businesses in the market that are about to go on sale. In Australia the average age of business owners is 58 years and 80% of them are about to retire from their business over the next 8- 10 years. These statistics are not too different in countries throughout the western world and with so many businesses about to change hands, only those that are well prepared will be able to maximise the price they will receive when exiting. It stands to reason that with more businesses on sale than willing buyers, business prices will fall. In order to capitalise and command the best price for your business, you will need to make sure yours is in tip-top condition with demonstrated sustainable profits, systems, processes and people.
If you fail to identify the laws of supply and demand, and the possible impact for you in exiting or selling your business, you will likely be caught out in a way that will see you failing to achieve the profitable exit you had hoped for.
In addition, if you are selling your business to a willing buyer, the purchaser will need to have financial capacity to afford the acquisition. Many purchasers will need to borrow funds from financial institutions. Since the Global Financial Crisis, lending institutions are scrutinising very carefully the approvals they make on business purchases, so you will need to ensure your business is very transparent in demonstrating sustainable income and profits.
Here’s my suggestion to get you started on the process to maximise your business income and profits for your succession:
1. Take the Business Exit Quiz (takes 2 minutes) to receive a diagnostic of the areas you may need to improve for an enhanced business outcome
2. Read the book “Your Business Succession”
3. Contact us with any questions you have about how to arrange your business succession so we can help you to position your business to achieve the best possible outcome for your long term financial success.
To Your Profitable Business Succession