Exit Readiness to Maximize Enterprise Value


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The benefit of creating your business succession plan in advance of a sale

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Exit Readiness to Maximize Enterprise Value

  1. 1. CBACAN Inc. Creative Business Advisors Exit Readiness Strategies Executive Business Coaching Enhancing the Value of Your Business
  2. 2. Exit Planning - NOT Planning your exit from the parking lot of Scotiabank Place after a Sens hockey game.
  3. 3. Rental Property
  4. 4. If you didn’t wake up tomorrow What would happen to your business?
  5. 5. Begin With the End in Mind Start Exit
  6. 6. Every Business Owner’s Goal To Sell the Company Exit Ready = Maximum Value
  7. 7. Don’t Sell a Fixer Upper!!
  8. 8. Did You Know • Baby Boomers are reaching retirement • Successful Entrepreneurs ready to sell • 40% of Business Owners plan to sell their business within the next 5 years
  9. 9. Law of Supply & Demand • There will be a crowded marketplace • Your business must stand out
  10. 10. Selling Your Business is All About Risk! • The higher the risk, the lower the valuation • The lower the risk, the higher the valuation • Risk refers to the relative risk a buyer feels if he were to invest in your company
  11. 11. How Do You Get More Money For Your Business??
  12. 12. Lower the Risk Levels! • Risk is derived from two indexes – The relative attractiveness of your business to an end user. – The readiness level of your systems and documentation to be open to scrutiny by a potential buyer.
  13. 13. What is Required? • Prepare an Exit Plan at least 12 to 24 months prior to selling • Develop checklist of the things to do to make your business more attractive • Implement the correct documentation and systems you will need to have in place • Establish a monitoring system
  14. 14. CBACAN • Prepare an Exit Readiness Report • Pinpoint Areas Requiring Improvement • Establish Timelines For Improvements • Define Monthly Deliverables • Implement a Weekly Scorecard
  15. 15. Exit Readiness Index Valuation Expectations 100% Compliance Issues Personal Expectations 90% Systems Processes and 80% Shareholder Goals Databases 70% 60% 50% Personal Knowledge Payment Considerations 40% 30% 20% Contracts 10% Immediate Value Readiness 0% Intellectual Property Credibility and Justification Company Documentation Brand Issues Management Systems and Marketing Documentation and Forecasts Systems Financials Employee and Management Issues
  16. 16. Valuation Indicator
  17. 17. What Makes a Business Attractive • Buyer looks for a return on investment • Based on steady growth of profits • Steady growth of revenue • Low risk of continuing this growth • Business is NOT reliant on the owner • High industry growth trend
  18. 18. The Benefits of the Plan • Profits Are Maximized • Business Value Is Enhanced • Employees are Happier • Business Is Ready To Sell • Target Sales Price Can Be Achieved
  19. 19. Maximum Value Profitability + Sustainability + Transferability
  20. 20. Ensure Your Business is • Built to Last For Decades • Ready to Sell Tomorrow
  21. 21. Remember The Fixer Upper?
  22. 22. Sell For Maximum Value
  23. 23. A Successful Exit • Maximizes net sales proceeds • Provides desired retirement income • Implements estate planning strategies • Assets are protected • Ability to enjoy life after sale
  24. 24. This is Exit Readiness
  25. 25. Don’t Delay
  26. 26. CBACAN Inc. Creative Business Advisors Free Exit Readiness Report dsaxe@cbacan.com 613-563-1085 Enhancing the Value of Your Business