seven step exit planning process™
TRANSCRIPT
Exit Your Business for Maximum Value At Minimum Risk
Agenda
• Exit Planning for Business Owners – Keith Brown and Chris Kassardjian
• Succession Planning – Douglas Anderson (DA)
• Accounting Techniques to Increase Business Value – Angelie Boholst
• Wealth Creation Through Franchise Ownership – Chuck Prenevost
• Questions?
• Apply at Registration Desk
• Networking
Exit Your Business for Maximum Value At Minimum Risk
Part 1 Presented by:
Keith Brown CFP, CLU, CH.F.C, FEA, CExP™
• Founder of Financial Confidence Advisors
• International Network of Exit Planning Professionals™
• Keith’s personal story
Keith Brown, CFP, CLU, CH.F.C, FEA, CExP™
Certified Financial Planner & Exit Planner:
• Over 30 years managing financial risks
• Wealth management for business owners, business families and executives
• Successfully sold co-owned company Daystar
• Sauder School of Business Family Enterprise Advisor FEA Designation 2012
• Certified Exit Planner (CExP™) designation through Business Enterprise Institute (BEI) in 2014
Disclaimer • We have provided written material with this oral presentation to make it easier for you to take
notes. Do not rely on the written material on its own because it may be incomplete or inaccurate without the additional context and information provided by the oral presentation.
• This presentation is for educational purposes only. It should not be construed as legal, tax or accounting advice.
• This presentation does not bind Financial Confidence Advisors Inc. to provide, or to continue to provide, any of the concepts or products described in the presentation. It also does not limit Financial Confidence Advisors Inc. ability to change any of the procedures that may be described in the presentation.
• If this presentation contains competitive information, we have made every effort to ensure its accuracy as of the date of the original oral presentation. We cannot, however, guarantee the accuracy and, if you have any questions regarding this information, you should contact the competitor directly.
• This document does not contain an opinion to business or asset value. Any business value discussed in this document is merely an estimate of value, and does not indicate or guarantee the price of your business or any interest in it can be sold. To determine accurately the value of your business, we recommend you engage a certified valuation specialist or certified business appraiser.
What is an Exit Plan?
• Holistic approach to a Business Exit Strategy
• Receive maximum value for life’s work
• Limit the Business Owner’s tax burden
• Keep control of the process
Benefits of an Exit Plan
• Exit Plan based on the owner’s objectives
• Experienced team of advisors to design and implement the plan
• Cash flow and a quantified business value
• Strong management team in place
• Time
OR
OVERVIEW
ONLY
Step One: What Are Your Objectives?
Principal issues all business owners wrestle with are: • Exiting the business on their timetable • Creating financial security for themselves and their family • Deciding who should get the business • How to maximize business value
We must bring key stakeholders in the process: • Shareholders • Spouse, Children, In-laws • Key Employees
Other considerations: • Leave a legacy? • Never “retire”? • Philanthropic works?
Step Two: Quantify Business & Financial Resources?
• Provides a baseline value
• Measures business and personal resources
• Comprehensive financial planning allows you to monitor progress toward stated objectives:
o Retirement goals
o Spending and cash flow needs
o Post-closing investment strategy
Assemble the Multi-Disciplinary Team
Other Advisors
Lawyer
Insurance Professional
Accountant
Estate Planner
Investment Banker
Exit Planner
Business Valuator
Financial Advisors
Part 2 Presented by:
Chris Kassardjian, BSc, MBA
• Founder of CK Global Solutions
• M&A Consultant with private equity investors
• Chris’ personal story
Exit Your Business for Maximum Value At Minimum Risk
Chris Kassardjian, BSc, MBA
Mergers & Acquisitions Consultant:
• Selling or acquiring business over $10M
• Private Equity for deals $10M to $500M
• Founder of CK Global Solutions
• BSc, MBA from California State University of Hayward Graduate of the Faculté des Sciences in Lille, France
• Accomplished international executive, senior management and small business experience in North America and Africa
Step Three: Maximize & Protect Business Value
• Grow business value to be able to sell the business
• Reduce income taxes upon sale of business
• Protect assets from business and personal creditors
• Motivate & keep key employees and management
• Focus on increasing cash flow
• Solidify and diversify customer base
• Implement strategies to grow the company
• Build solid management team and groom a successor
Step Four: Ownership Transfer to Third Parties
Universal Objectives: • Cash at closing • Eliminate financial risk • No family succession issues • Speed of exit Other Considerations: • Only 25% of all businesses are sold to Third Party • Sales under $10 million – one out of three sold to Third Party • Sales over $10 million – 50% sold to Third Party
( Business Reference Guide)
Step Five: Ownership Transfer to Insiders
Universal Objectives:
• Achieve Exit Objectives of:
o Transferring ownership to a family member
o Selling to Key Employee or Key Employee Group (KEG)
o Transitioning ownership to a Partner(s)
• Motivate and retain Key Employees
• Reduce tax burden
• Reduce risk and increase amount of money received
Exit Your Business for Maximum Value At Minimum Risk
Part 3 Presented by:
Keith Brown CFP, CLU, CH.F.C, FEA, CExP™
• Founder of Financial Confidence Advisors
• International Network of Exit Planning Professionals™
• Keith’s personal story
Step Six: Business Continuity Planning
• Objectives still achieved if you don’t survive
• Retain ownership and control even if co-owner departs
• Can force non-contributing owners to leave
• Ensures survival of the business for the benefit of others
• Results in family receiving value of your interest
• Retain key employees and stay bonuses
• Contingency planning for risk management
Step Seven: Personal Wealth & Estate Planning
• Preserve wealth, minimize taxes using both lifetime and death planning tools
• Integrates lifetime exit objectives with estate plan
• Estate planning becomes part of business planning
• Result is comprehensive exit planning
Succession Planning
Presented by Doug Anderson (DA)
• 35 years hands-on business experience helping over 500 companies grow
• 22 years senior sales management experience
• Certified Consultant for Winslow Research Institute
• Used by Fortune 1000 companies and professional sporting organizations: MLB, NFL, NHL and others
• Business Succession Planning
• 3 most important traits related to business success
Succession Planning
Think About It
• Each of us is different from everyone else in this world because of our personalities!
• Who should run your business after you leave?
Think About It
• This philosophy is not unique to Winslow Research Institute
• Plato said it best . . . .
• Know Thyself !
Think About It
• Behaviour is difficult to determine!
• Everyone has three personalities . . .
1. Who you think you are.
2. Who others think you are.
3. Who you really are.
Fact
• The quality of an organization’s personnel is frequently the single factor that determines whether the organization is going to be successful, whether it will realize a satisfactory return on its investment, and whether it will reach its basic objectives! William J. Winslow
Management’s Mission
• Management's primary responsibility is to get appropriate results through the effective use of people.
Think About It
• The 3 most important personality traits related to success in business!
o Ambition
o Self-Confidence
o Tough-Mindedness
Ambition
• Driven to achieve and to be successful
• Desire to attain career excellence
• Respond positively to competitive situations
• Aspire to accomplish difficult tasks
• Set and maintain high goals
Tough-Mindedness
• The ability to accept strong leadership and criticism without emotional sensitivity
• Do not need excessive praise, support or encouragement from their managers
• Do not become easily upset by problems
• Can accept rejection and disappointments
• Recover quickly when things go wrong
Self-Confidence
• Believe they have the skill, knowledge, and experience required to be successful
• Have unfaltering trust in self
• Handle unexpected situations well
• Quick to express opinions, beliefs and ideas
• Feel sure of personal powers and abilities
Winslow Quotation
• “It is not personality assets that make a person successful … It is their liabilities which prevent them from being successful!”
Winslow Personality Traits
Interpersonal • Sociability • Recognition • Conscientiousness • Exhibition • Trust & Nurturance Dedication • Ambition • Endurance • Assertiveness • Boldness • Coachability & Leadership
Organizational • Alertness • Structure • Order • Flexibility • Creativity & Responsibility Self-control • Self-confidence • Composure • Tough-mindedness • Autonomy • Contentment & Control
Angelie Boholst, Tax Angel® Consulting Ltd.
• Mompreneur and owner of Tax Angel Consulting Ltd.
• Helps other entrepreneurs succeed in their businesses to maintain a happy and healthy entrepreneur lifestyle
• Over 5 years bookkeeping experience in public practice
• Accounting diploma with Cambridge College
• Universal Accounting Professional Bookkeeper designation
Accounting Techniques To Increase Business Value
Agenda
• Accounting Manual
• Vendor List – Contacts & Contracts
• Numbers Due Diligence
• Transition Assistance
• 10 Questions to Ask Before Selling Your Business
Accounting Manual
Vendor List – Contacts & Contracts
Numbers Due Diligence
• Cash flow Analysis – Review of Previous Data and Projection for new owner
• Benchmark report
• Review of the financial statements – yearly and monthly comparisons
Transition Assistance
• Financing needs
• Review of Financial Statements
• Access with us for plain English consultation related to accounting/taxes/business processes
10 Questions to Ask Before Selling Your Business
1. Is my business ready to sell?
2. How is a buyer going to value my business?
3. Who should be on my team when I sell?
4. Is it the right time to sell?
5. Is the market right?
10 Questions to Ask Before Selling Your Business
6. Can I cope with the changes on the horizon?
7. Can my business thrive without me or without a key customer?
8. Would I be willing to stay on if the buyer wants me to?
9. What are the potential deal breakers?
10. Would I consider alternatives to an outright sale?
Conclusion
• “Would you tell me, please, which way I ought to go from here? That depends a good deal on where you want to get to.” Alice in Wonderland, Lewis Carroll
About Chuck Prenevost
• FranNet® Franchise Specialist, Western Canada.
• Helps entrepreneurs find a proven business model to start and stay in business.
• Helps executives in career transition to start a business to eliminate future income gaps.
• President & Owner of Plant Maintenance Group Inc, tropical plant service business providing horticultural plant services to corporate Canada and successfully sold it after 21 years in 2008.
About FranNet
• Franchisee – Franchisor MATCHMAKERS
• Established in Vancouver in 1990
• Canada-wide coverage
• Work with folks on a face-to-face / locally
• 70 quality Franchisor companies – no food
• Offer services to our clients at No Cost
The FranNet Advantage
Why Franchising Works
• Importance of structure
• Proven systems to attract customers
• Refined business processes to retain
• Mitigate your risk with proven formula
Why Franchising Works
Proven, systematic approach to starting and staying in business
• Experience
• Simplicity
• Initial Training & Ongoing Support
• Name Recognition
• Sales, Marketing & Operational Systems
• Longer term perspective
Getting Clarity
Clarify your Destination
• Do I have the necessary skills to run a business?
• How much can I afford?
• Where’s the money coming from?
• How do I narrow down my search?
Our Most Successful Candidates
Folks Going Through Career Transition
• Recently been packaged out of corporate
• Want to take control of their career
• Desire to have more Lifestyle flexibility
Semi Absentee or Passive Ownership
• Invest in business while keeping corporate job
• Manage your business 15 hours per week
• Create additional wealth creation
The Franchise Strategy
Powerful Strategy for Wealth Creation
• Income replacement / second payday
• Tax strategies leveraging Capital Gains
• Future security – no more layoffs
• Control – day to day and big picture
• Pride of ownership
Questions?
Apply at Registration Desk