Can you afford to retire from your business?

By: Business Growth and Exit Specialists Pty Ltd (BGES)  12-May-2016
Keywords: Business Planning, Business Consultant


Reaching retirement is a stage of your life that is meant to often looked forward to and meant to be some of the best years of your life. This period is also the time seen as when you, as a business owner, has the opportunity and ability to reap the rewards of your labour and hard work over the years.

However, a shortfall when selling or exiting your business can have a significant negative impact on your retirement plans and this may even force you to lower the standard of your retirement lifestyle and enjoyment. Unfortunately in a worst case scenario this may also lead to the situation in which you cannot afford to retire.

The Business Value Gap (BVP) and Are you Business Exit/Sale Ready?

Business Value Gap, is the difference between your current business value and what you aim to achieve when you exit your business. A Business Value Gap Strategy and Business Growth Strategy are needed to achieve your expected standard of living during retirement.

It is important for business owners to understand the value of their business, the size of the value gap, and how to improve the gap through business value improvement strategy and actions to be “Business Exit/Sale Ready”.

A Proven Methodology:

In achieving your business’s desired outcomes, a proven methodology and the knowledge learnt from real life experience building profitable and successful businesses are critical. The 8 steps that are recommended for successful business exit are as follows:

Understand your business exit aspiration/requirement;
Determine the current business value using a “Proven Business Valuation Methodology”;
Determine “Business Value Gap” (BVP);
Formulate strategy and actions for business value improvement and business exit alternatives;
Quantify potential future business value within a certain time frame;
Implement business exit/value improvement strategy and actions;
Monitor and measure improvements on a regular basis and also determine corrective actions to achieve your desired outcomes;
Execute business exit actions, whether it is a family succession plan, sale of the business, management buyout or other alternatives including mergers and acquisition.

The ability to demonstrate and document a record of profitable sales records, profit and future earning/profit projections as well as cash flow are critical elements in the determination of your business value. Thus their is also the need for your business’s past 3 years financials, tax returns and current Business Sustainability/Growth Strategy as well as a 3 year budget; these tools can be most helpful to you as the seller and also may be crucial information to potential buyers.

Other pertinent information about your business’s customers, competitors, operation, marketing/sales, human resources and suppliers are also relevant to your potential buyer. These aspects should be incorporated in your “Business Sustainability/Growth Strategy” document and this should also outline any strengths, weaknesses, opportunities and threats to the business.

Achieving the desired outcomes

To achieve your business’s desired outcomes assistance from a Business Advisor can assist in being “Business Exit/Sale Ready”. This external assistance can ensure that business value maximisation has been carried out and properly implemented and this can be the difference between a successful and profitable business and you having to settle for something less when exiting your business. A Business Advisor can prepare the relevant information needed when selling your business, ensuring that your business is also ready for any potential buyer’s Due Diligence (a detailed investigation of every area of your business) they can also assist with managing this process which is usually carried out by the buyer’s Business Advisor or Accountant.

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Keywords: Business Consultant, Business Planning

Contact Business Growth and Exit Specialists Pty Ltd (BGES)


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