Planning your exit strategy to meet your personal financial goals with certainty and in the most tax efficient manner possible

1. The Business Transition ProcessThe Business Transition Process
(BTP)(BTP)
Planning your exit strategy toPlanning your exit strategy to
meet your personal financial goalsmeet your personal financial goals
with certainty and in the most taxwith certainty and in the most tax
efficient manner possibleefficient manner possible

2. What is The BTP?What is The BTP?
 A plan offered by The Letson Agency and ourA plan offered by The Letson Agency and our
strategic alliance network that is unique instrategic alliance network that is unique in
NashvilleNashville
 A plan and a team with specific skills, andA plan and a team with specific skills, and
products that:products that:
 Will meet business owners’ personal financial objectivesWill meet business owners’ personal financial objectives
under all circumstancesunder all circumstances
 Will maximize marketability of a businessWill maximize marketability of a business
(minimize time on market, more net to owners)(minimize time on market, more net to owners)
 Will protect the continuity of a business before, duringWill protect the continuity of a business before, during
and after an ownership transitionand after an ownership transition
TheThe BBusinessusiness TTransitionransition PProcess (BTP) is:rocess (BTP) is:

3. Why Was The BTP Developed?Why Was The BTP Developed?
 Ultimately, a business will either sell or closeUltimately, a business will either sell or close
 Business owners areBusiness owners are
 Often disappointed when they try to exitOften disappointed when they try to exit
 Unprepared for circumstances of exitUnprepared for circumstances of exit
 Sometimes third-party business buyers neitherSometimes third-party business buyers neither
see nor believe the value in a businesssee nor believe the value in a business
 Nationally, of all businesses listed by businessNationally, of all businesses listed by business
brokers, 3 of 4brokers, 3 of 4 will not sellwill not sell because thebecause the
business and/or the seller arebusiness and/or the seller are not readynot ready

4. ?
?
?
BTP OverviewBTP Overview
ClosetheGapClosetheGap
Seller
Wants
Market
Value
Seller’s
Estate
Planned Results Before, During And After the
Transition
Seller
Needs
Business
Value

5. Financial PlanningFinancial Planning
 Determine Life GoalsDetermine Life Goals
 Interesting and Productive Life After ExitInteresting and Productive Life After Exit
 Benefit to important Individuals andBenefit to important Individuals and
OrganizationsOrganizations
 Create, Grow, and Preserve Wealth ToCreate, Grow, and Preserve Wealth To
Meet GoalsMeet Goals
 Personal Net WorthPersonal Net Worth
 Tax Efficient Business TransitionTax Efficient Business Transition
 Plan Utilization of Wealth During LifePlan Utilization of Wealth During Life
 Plan Distribution of Wealth After DeathPlan Distribution of Wealth After Death

6. Business PlanningBusiness Planning
 Current AssessmentCurrent Assessment
 Business Assessment, Business ValuationBusiness Assessment, Business Valuation
 Top-Line GrowthTop-Line Growth
 Marketing, Sales, DistributionMarketing, Sales, Distribution
 Bottom-Line GrowthBottom-Line Growth
 Cost Control, Supplier Relations,Cost Control, Supplier Relations,
Restructuring DebtRestructuring Debt
 Transition PlanningTransition Planning
 Leases, Debt, Contracts, Key EmployeesLeases, Debt, Contracts, Key Employees

7. Protect The PlanProtect The Plan
 Risk ManagementRisk Management
 Key-PersonKey-Person Insurance (Incentive to Perform)Insurance (Incentive to Perform)
 Buy-Sell Agreements (Life and Disability)Buy-Sell Agreements (Life and Disability)
 Management Succession PlanManagement Succession Plan
 Justify Risk Management Cost/Benefit WithJustify Risk Management Cost/Benefit With
Periodic Assessment / ValuationPeriodic Assessment / Valuation
 Adjust plan according to measurableAdjust plan according to measurable
progressprogress
 Adjust insurance as gap between targetAdjust insurance as gap between target
value and current value closes, to adequatelyvalue and current value closes, to adequately
fund Key-Personfund Key-Person

8. The Transition:The Transition:
Third-Party Buyer (Business Broker)Third-Party Buyer (Business Broker)
 Prepare Marketing MaterialsPrepare Marketing Materials
 Business Summary, Ad Copy, CBR, MailersBusiness Summary, Ad Copy, CBR, Mailers
 Finalize “Right Buyer” and Target MarketingFinalize “Right Buyer” and Target Marketing
 Strategic, Cash Flow, PEG, IndustryStrategic, Cash Flow, PEG, Industry
 Select Marketing ChannelsSelect Marketing Channels
 Ads, Internet, Email, Direct Mail, TelemarketingAds, Internet, Email, Direct Mail, Telemarketing
 Buyer ManagementBuyer Management
 Qualify, Presentations, Tours, Offer DevelopmentQualify, Presentations, Tours, Offer Development
 Transaction ManagementTransaction Management
 Offer Development / Presentation, Negotiation, DueOffer Development / Presentation, Negotiation, Due
Diligence, Financing, ClosingDiligence, Financing, Closing

9. The Transition:The Transition:
Employee Buyer (Buy-Sell Agreement)Employee Buyer (Buy-Sell Agreement)
 AdvantagesAdvantages
 Certainty of Deal at Defined ValuationCertainty of Deal at Defined Valuation
 Planned FundingPlanned Funding
 Best Case for Continuity of BusinessBest Case for Continuity of Business
 Opportunity for Efficient TaxationOpportunity for Efficient Taxation
 FundingFunding
 Key-Person Life Insurance PolicyKey-Person Life Insurance Policy
 Split-Dollar Life Insurance PlanSplit-Dollar Life Insurance Plan
 Deferred Compensation PlanDeferred Compensation Plan

10. The Transition:The Transition:
Tax Planning Value AddedTax Planning Value Added
 Minimize tax due from transitionMinimize tax due from transition
 To OwnerTo Owner
 To Principle ShareholdersTo Principle Shareholders
 To EstateTo Estate
 Minimize taxation after transitionMinimize taxation after transition
 Facilitate asset transfer into estateFacilitate asset transfer into estate

11. Life After the Transition:Life After the Transition:
For The SellerFor The Seller
 Implement Management Transition PlanImplement Management Transition Plan
 Implement Personal Asset ManagementImplement Personal Asset Management
PlanPlan
 Implement Life PlanImplement Life Plan
 New Business, Philanthropy, Voluntarism,New Business, Philanthropy, Voluntarism,
TravelTravel

12. Life After the Transition:Life After the Transition:
For the New Business OwnerFor the New Business Owner
 A clear understanding of how to leadA clear understanding of how to lead
your new companyyour new company
 A smooth transition of employees,A smooth transition of employees,
customers, and supplierscustomers, and suppliers
 A vision of the growth potential &A vision of the growth potential &
the partners that will take you to thethe partners that will take you to the
next levelnext level

13. Benefits of BTPBenefits of BTP
 Identifies And Meets Goals Of The OwnerIdentifies And Meets Goals Of The Owner
 Optimizes The Business TransitionOptimizes The Business Transition
 More Wealth Preserved, Less Cost & TimeMore Wealth Preserved, Less Cost & Time
 Always Reflects Current State Of TheAlways Reflects Current State Of The
Business, The Owner, And The MarketBusiness, The Owner, And The Market
 Motivates Buyer To Complete TheMotivates Buyer To Complete The
TransactionTransaction
 Seller Ready For Life After TransitionSeller Ready For Life After Transition

14. What Should We Be Doing Now?What Should We Be Doing Now?
 Establish life-goals for afterEstablish life-goals for after
transitiontransition
 Assess the business’ capability forAssess the business’ capability for
achieving those goalsachieving those goals
 Select the products, services, andSelect the products, services, and
partners needed and develop a planpartners needed and develop a plan
that makes sensethat makes sense To YouTo You
 Execute the planExecute the plan

15. Final ThoughtsFinal Thoughts
“You won’t catch anything
while the hook is in the boat”
My Grandfather
““Life is what happensLife is what happens
while you’re making other planswhile you’re making other plans””
John LennonJohn Lennon

16. ThanksThanks
Bren LetsonBren Letson
bren@ru-ready-now.combren@ru-ready-now.com
615-292-0636615-292-0636