How to acquire other businesses or exit out of your own.

1. BUILD SIGNIFICANT VALUE
ACQUISITIONS

2. Learning Objectives
1. Understand the acquisitions process
2. Find out how to acquire another business
using none of your own money
3. How to use acquisitions as a growth
accelerant for your business

3. 3 STRATEGIES FOR
GROWING
NEW Product
NEW Market
Existing Product
NEW Market
NEW Product
Existing Market
Existing Product
Existing Market

4. TRADITIONAL VALUATION
Your Current BIZ:
Revenue: $500,000
COG: $200,000
GP: $300,000
OP Exp: $250,000
Profit $50,000
Acquisition:
Revenue: $200,000
COG: $100,000
GP: $100,000
OP Exp: $100,000
Profit $0
Your NEW BIZ:
Revenue: $700,000 Adding $200k from
acquisition
COG: $280,000 lower COG due to
buying power
GP: $420,000 Higher Gross Profit
OP Exp: $300,000 Slightly lower due to cost
+

5. SELLING YOUR
BUSINESS
Your Current BIZ:
Revenue: $500,000
COG: $200,000
GP: $300,000
OP Exp: $250,000
Profit $50,000
Your NEW BIZ:
Revenue: $700,000
COG: $280,000
GP: $420,000
OP Exp: $300,000
Profit $120,000
Sell Business for x 5 Profit Multiple
= $250,000
Sell Business for x 5 Profit Multiple
= $600,000
That’s $350k in extra cash in your
pocket!

6. ACQUISITION
SELECTION
• Cultural fit
• Strategic fit
• Financing strategy
• Stakeholder retention strategy

7. HOW TO FUND AN ACQUISITION
Funding Option
•Option 1: Cash
•Option 2: Cash + Cash Debt
•Option 3: Cash + Vendor Finance
•Option 4: Cash Debt + Vendor Finance
•Option 5: Cash + Investor $
•Option 6: Investor $ + Vendor Finance
•Option 7: Cash + Investor $ + Vendor Finance
When to Use
•You have enough $$ for deal
•You can borrow enough $$ for deal
•You can negotiate with seller
•You can borrow + negotiate enough $$
•You want Smart $$ / need more $$
•You can negotiate + need/want Smart $$
•You’ll use your $$ + Negotiate + Smart $$

8. BUILD SIGNIFICANT VALUE
EXITS

9. 1. What is your ideal path to Exit? Build for cash-flow or build for
asset value? Build to run vs Build to sell?
2. Identify potential strategic buyers
3. Identify strategic advantages in your business
4. Prepare your business for sale
LEARNING OBJECTIVES

10. 1. Do you have a valuation/sales price in mind for your business?
2. Do you have personal/financial goals that your business sale needs to
fund or make time for?
3. When do you want to leave the business?
4. Are you happy to stage your exit over several years?
5. Do you want a lump sum to retire with, or could you work with several payments over
time?
6. Do you want to retain any ownership in the business?
7. Do you want to transition the business to a family member?
8. Do you have any key members of staff that would be keen to take on the business?
9. Do you have a potential/interested buyer in mind?
10. Do you have a view of what the business will look like after you retire?
-Are you interested in leaving a legacy?
STEP 1: GOALS AND
OBJECTIVES

11. 1. Who do you know already that can make more money from your business than you
can?
2. What other businesses similar to this can you also find?
3. How can you put your business on their radar?
STEP 2: IDENTIFY POTENTIAL BUYERS

12. What parts of your business are most valuable to these buyers? How can you further
build out this value over time to maximise your sale value?
Activity: Pairs/External perspective. Partner up with your neighbor who’s not in your
business and brainstorm strategic advantages in each other’s businesses with the
advantage of a fresh set of eyes - an external perspective.
STEP 3: IDENTIFY STRATEGIC
ADVANTAGES IN YOUR BUSINESS

13. 1. Identify potential strategic buyers and sow the seed early
2. Prepare your business for sale - perform DD on yourself
3. Finalise all strategic build out ready for sale
4. Notify buyers
5. Create competitive tension - Scarcity/Fear
STEP 4: EXIT PROCESS