Experience. Trust. Guidance.
Go or Grow

Experience. Trust. Guidance.
Your company is a reflection of your
vision, hard work, business savvy, and
resiliency. Now that you’re thinking of
walking away, you’ll need all those qualities
to see you through the deal.

Experience. Trust. Guidance.
What you’ll learn:
An understanding about
what’s involved in selling
your business
A framework that will assist
you in making informed
decisions about selling
your business.

Experience. Trust. Guidance.
The Market
26 Million Small Businesses
# of Annual % of
Businesses Sales Businesses Sell for % for Sale % that Sell
3.1 M < $500K 55 <$500K 20 20
1.2 M $500K-$1M 21 <$1M 20 20
690K $1 - $2.5M 12 <$2.5M 20 25
566K $2.5-$10M 10 <$10M 20 33
90K $10-$50M 2 <$50M 10 50
22K >$50M 1 >$50M 10 100

Experience. Trust. Guidance.
Three Paths To Exit
Pass the business on
to next generation
Close / Liquidate
Sell to a third party
Less than 17% of businesses will
be passed on to children, down
significantly from decades past.

Experience. Trust. Guidance.
Baby Boomer “Tidal Wave”
Most small businesses are owned by
baby boomers
7 out of 10 small businesses will be
for sale in the next 5-10 years
Largest transfer of privately owned
businesses in US History

Experience. Trust. Guidance.
US Business Transfers
1,400% Growth 1,000,000
750,000
350,000
50,000
2001 2005 2009 2013
"An estimate of 65% to 75% of all small businesses will go
up for sale in the next five to 10 years. Why? Retiring baby
boomers." - Inc. Magazine

Experience. Trust. Guidance.
Time To Make A Decision
Prepare for Hold and
sale now Grow

Experience. Trust. Guidance.
Factors Critical To Selling
Planning
Positioning
Execution

Experience. Trust. Guidance.
Most Businesses Never Sell
• What are the odds of selling?
Annual Revenues Success Rate
Below $750K 1 out of 5.5 = 18%
$750K to $2 Mil 1 out of 4 = 25%
$2 Mil to $6 Mil 1 out of 3.5 = 35%
$30 Mil + 1 out of 3 = 30%
"Historically, only one-quarter to one-third of all private
companies ever manage to find a buyer” –Inc. Magazine

Experience. Trust. Guidance.
Why The High Failure Rate?
Business is Priced
Incorrectly
Business is not properly
prepared for sale
Insufficient Market
Exposure

Experience. Trust. Guidance.
How Long Does It Take To Sell?
Average = 7-9 Months

Experience. Trust. Guidance.
Who Are The Buyers?
Employees
Strategic Acquirers
High Net Worth Individuals
Private Equity Firms
International Buyers

Experience. Trust. Guidance.
Employees
Typically structured as an
Employee Stock Option Plan
Ideal for companies with:
- $1 Million or more in Earnings
- $1 Million or more in Employee
Payroll
Company must be large
enough to sustain and justify
high cost of transaction.

Experience. Trust. Guidance.
Strategic Acquirers
Complementary Company
best case: highest value, lowest risk
Non-Local Competitor
second best: good value, moderate
risk
Local Competitor
last resort: low value, high risk

Experience. Trust. Guidance.
High Net Worth Individual
Most Common Buyer
- Corporate Refugee
- Second Career Baby Boomer
- Experienced and Financially
Qualified
- Highly Motivated

Experience. Trust. Guidance.
Private Equity Firms
Typical Investment Criteria:
- $25 Million + In Sales Revenue
- $1 Million + In Earnings
- Differentiated Product Or Services
- Defensible or Proprietary Market
Position
- Strong Layer Of Management

Experience. Trust. Guidance.
International Buyers
Strong Premiums Based
On Exchange Rates
Streamlined Entrance Into
US Markets

Experience. Trust. Guidance.
What Buyers Want
Profitable Business
Experienced, Loyal
Employees
Diverse Customer Base
Sustainable Growth
Potential

Experience. Trust. Guidance.
Key Factors For Success
Provide the buyer with fair
market salary
Fund capital expenditures
required to maintain
historical revenues
Provide a reasonable
Return On Investment
Service acquisition debt in
3-5 years

Experience. Trust. Guidance.
What’s A Business Worth?
Unlike real estate, comparables
cannot be used because every
business is entirely unique in
costs, expenses and profit
Unlike public companies, share
prices are unknown
Common mistake is to use
multiples or “rules of thumb”

Experience. Trust. Guidance.
Arriving at an Accurate Valuation
Valuation Approaches used to determine value:
- The Asset Based Approach
- Market Approach
- Income Approach
Required:
- Recasting of earnings
- Summary of industry trends
- Market Comparison Summary
- Financial analysis
- Analysis of tangible/intangible assets,
- Recasting of balance
- Analysis of historical income statements and tax returns
- Future performance forecast / future industry outlook

Experience. Trust. Guidance.
How CAL Financial Can Help
Providing the information
needed to determine if
selling is the right decision
Help you sell your business
for the highest price, with
the best terms, in the
shortest practical time.

Experience. Trust. Guidance.
About CAL Financial Group, Inc.
The leading and fastest growing
independent business
brokerage in North America
Results Driven Seller
Representation
Specialize in Selling Business
under $10 Million in revenues

Experience. Trust. Guidance.
About CAL Financial Group, Inc.
Headquartered in Crystal Lake, IL
Locations throughout the US
Experienced team of
professionals with backgrounds
including:
- Business Ownership
- Mergers and Acquisitions
- Real Estate
- Financial Services
- Insurance
- Accounting
- Law

Experience. Trust. Guidance.
Why CAL Financial Group, Inc.?
Seasoned Dealmakers
Marketing Intensive Approach
Proprietary Technology
Extensive Internet Presence
Developed a Proven Method
Through Market Experience &
Knowledge

Experience. Trust. Guidance.
8 Step Approach
Our results driven approach assists owners in selling for
maximum value, in the shortest practical time.
1
• Assessment Of Value S
5 Screening / Qualifying
2
• Engagement N
6 Negotiation
3
• Preparation D
7 Due Diligence
4
• Marketing C
8 Closing / Settlement

Experience. Trust. Guidance.
1 Assessment Of Value
20% Higher Selling Price
3 x Success Rate
50% Shorter Deal Cycle
Reduce Risk of Leaving Money on the Table
Increases odds of bank financing
50% Higher Cash Settlement At Closing
Reduces Due Diligence Time
Reduces Professional Fees
Eliminates “Tire Kicking” Assessment of
Value Workbook

Experience. Trust. Guidance.
2 Engagement
• After reviewing the valuation report, and
have decided to sell now. An Engagement
Agreement must be signed.
100% Performance Based
Success Fee Paid At Close
No Up Front Costs
No Obligation
No Penalties
Engagement
Agreement

Experience. Trust. Guidance.
3 Preparation
At this stage we will prepare two
key documents:
Blind Profile
A brief one page introduction
confidentially identifies key attributes of
your business without identifying your
business contact information.
Confidential Profile
Detailed overview of the business
financial, operational, management, str
engths, weaknesses, and industry and
market summary.
Blind Profile

Experience. Trust. Guidance.
4 Marketing
We develop and implement a
marketing plan specific to your
business that involves distributing
the Blind profile to:
Our global database of over
5,000 active pre-qualified
buyers and investors
Our network of
local, regional, and national
associations
Our syndicated internet
advertising networks

Experience. Trust. Guidance.
5 Screening/Qualifications
Prospective Buyer Inquiry
Non-Disclosure /
Confidentiality Agreement
Qualification
- Background
- Experience
- Financial Capacity
Confidential
Buyer Profile

Experience. Trust. Guidance.
6 Negotiations
We will negotiate on your behalf to
arrive at satisfactory:
Price
Terms
Financing
Timeline
Contingencies
Post –Sale Participation
Offer To Purchase

Experience. Trust. Guidance.
7 Due Diligence
Coordinate Operational
- Meetings
- Interviews
- Site Visits
Coordinate Financial Reviews
Information Requests
- Tax Returns
- P&L’s
- Invoices
- Contracts, Etc.

Experience. Trust. Guidance.
8 Closing/Settlement
• To ensure a smooth timely
transition, we assist with the
complex financial, legal, and
accounting aspects involved with
the closing process. We interface
directly with accountants, attorneys
and bankers to coordinate
communications and documentation
with speed and efficiency

Experience. Trust. Guidance.
Why Sell Now?
Market is Flush With Record Number of Buyers
Experienced professionals
with savings and retirement
accounts are getting laid off
Business owners are seeking
to grow by acquiring other
businesses

Experience. Trust. Guidance.
Why Sell Now?
Capital Gains Tax Rate Is Low – 15%
Interest Rates At All Time Low
Avoid “Tidal Wave” of sellers
Future risks are unknown
Present value can net more than
future potential

Experience. Trust. Guidance.
Next Steps
Decide what your goals are, and if
it’s really time to get out
Prepare for the sale as far in
advance as possible
Assemble a team of advisors
Determine how much your business
is worth
Approach and attract the right
buyers
Structure and close the deal

Experience. Trust. Guidance.
• Schedule a Confidential, No Cost,
No Obligation assessment.
• Call Us Today:
• 815-459-0009 or visit www.calgrpinc.com
Tom Gosche, Business Strategist
630-675-8971 tgosche@calgrpinc.com