© 2014 exit planning institute the exit planning process overview of the exit planning process...
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© 2014 Exit Planning Institutewww.exit-planning-institute.org
The Exit Planning Process• Overview of The Exit Planning Process• Assessing transition Readiness• Basics of Business Valuation• Introduction to Value Enhancement • Financial Planning for Business Owners• Exit Options Analysis• Implementation – Next Steps
Instructor:
Chris Snider, CEPAPresident & CEOExit Planning Institute Aspire Plus USA(216) [email protected]
© 2014 Exit Planning Institutewww.exit-planning-institute.org
Exit planning is the conscious effort to
maximize enterprise value while enabling the
conversion of that ownership into personal financial freedom and
peace of mind.
© 2014 Exit Planning Institutewww.exit-planning-institute.org
Maximizes the value of the business
Ensures you are personally and financially prepared
Ensures you have planned for the third act of your life
© 2014 Exit Planning Institutewww.exit-planning-institute.org
An Exit Plan addresses all of the…
Business Personal Legal Financial, and Tax issues
involved in operating a privately owned
business
© 2014 Exit Planning Institutewww.exit-planning-institute.org
Exit Planning Institute’s State of Owner Readiness Survey 2013
• 2/3rds are not familiar with all exit options• 78% have no formal transition team; 83% have no written
transition plan; 49% have done no planning at all• Less than 7% have a formal life after plan• 40% have no plans in place to cover illness, death or
forced exit• 1/2 feel ownership transition plans require the company to
remain profitable for plans to be properly executed, yet 86% have not taken on a strategic review or a value enhancement project
• 56% felt they had a good idea of what their business is worth yet only 18% have had a formal valuation in the last two years.
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DeathDisabilityDivorceDistressDisagreement
© 2014 Exit Planning Institutewww.exit-planning-institute.org
Owners are leaving $ on the table because they are focused on income generation;
not focusing on enterprise valueIncome does not automatically translate
to valueMost businesses are not salable and do
not make it through the second generation
© 2014 Exit Planning Institutewww.exit-planning-institute.org
“Age Wave” First boomers turned 65 in 2011; 10,000 turn 65
everyday; the youngest are now 50. Own 63% of the private businesses in U.S. 80-90% of their wealth is tied up in their businesses EPI recent survey confirms: 75% plan to transition
over the next 10 years; 48% in the next 5 years Represents a transfer of 4,500,000 businesses and
over $10 trillion of wealth
© 2014 Exit Planning Institutewww.exit-planning-institute.org
© 2014 Exit Planning Institutewww.exit-planning-institute.org
Third Act Goals and Objectives Personal Purpose Lifestyle S.T.E.P.
© 2014 Exit Planning Institutewww.exit-planning-institute.org
Focuses on Value Acceleration vs. Income Growth Starts with an Assessment and
Valuation – i.e. Current State Roadmap and Benefits: Personal & Business Deliver in 90 Day Sprints De-Risk First Accountability and Re-Calibrate Every 90 Days Grow or Exit? Delay the Decision Time and Money?
© 2014 Exit Planning Institutewww.exit-planning-institute.org
Step Min. Period
1. Prepare exit plan 6 months – 1 year
2. Build value and complete tax planning 1 year or more
3. Investment banking/sales process 1 year
4. Transition process 1 year or more
Total Time 3.5 years or more