1. EXIT STRATEGY PLANNING “ Achieving optimum value for your business” 06/25/10 PACE CAPITAL RESOURCES, LLC
2. EXIT STRATEGY PLANNING 06/25/10 PACE CAPITAL RESOURCES, LLC Business Planning Exit Strategy Planning Estate Planning “ Exit Strategy Planning coordinates and integrates Business Planning and Estate Planning based on the Business Owner’s objectives”
20. SWOT ANALYSIS 06/25/10 PACE CAPITAL RESOURCES, LLC Strengths: Weaknesses : What do others see as your strengths? What factors lose you sales? What do you do well? What could you improve? What advantages do you have? Where do you have fewer resources? What unique resources do you have? What do others see as weaknesses? Opportunities: Threats: What opportunities are open to you? What trends can harm you? Take advantage of current trends? What is your competition doing? Can you turn your strengths into opportunities? What threats do your weaknesses expose you to?
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
Editor's Notes
According to a PricewaterhouseCoopers 2005 survey: There are more than 9 million business owners of which more than half are 50 years old or older Firms with $5 million to $150 million of revenue 2/3 rd of the owners plan to leave in 10 years More than 75% of the owners have done little planning for what will be the single most significant financial event of their lives According to the SBA, at any given time 40% of U.S. businesses are facing the transfer of ownership issue…….primary cause of failure…..lack of planning THERE IS A NEED FOR EXIT PLANNING….Not addressing the complex issues relating to ownership transfer can have some very negative results….to name a few ….failed transaction, huge tax bill, family feuds and potential chaos should an unexpected event happens to the owner or key employee Now let’s talk about the components of an Exit Plan
The role is one of educator, developer, coordinator, facilitator and consultant….LOOK AT ME AS A GENERAL CONTRACTOR Keep in mind the owner is going down a path never traveled before, faced with the single most significant financial event of their lives…I am there to educate them on the process taking away some of the unknown…..I am in their corner from start to finish helping them balance two key emotions “FEAR AND GREED” While I am helping with the balancing act I will assist with putting together an advisory team consisting of an attorney, cpa, insurance and financial professional most often are existing advisors I will coordinate and facilitate the process working interdependently with the advisor team Develop an operating strategy enhancing the value drivers of the business while addressing weaknesses, opportunities and threats Implementation
Higher exit multiple and minimizing the tax bill By positioning the business with features that the market will pay a premium for CURB APPEAL IF YOU WILL For example: getting a .25 to .5 increase in multiple on the $3 million EBITDA company equates to $750 thousand to $1.5 million to the owner As far as pricing I can be flexible spreading payments over time or structuring a success fee on exit….we can talk in more detail later The real cost to the owner is NOT having an Exit Strategy Plan, having a plan will net the owner more after tax cash The process is adaptable: owner objectives, company attributes, industry structure will dictate or prioritize the executive strategy of the plan.
This slide illustrates the components of the seven step process used in developing a comprehensive Exit Strategy Plan Each component we will talk about in more detail later on in the presentation Now ….What should an Exit Strategy Plan do for you
