How To Hire A Ceo / Professional Management Team to Enhance Selling A Business

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We at Exit Planning LLC have expertise in helping owners find and hire a CEO to lead the company. We meet with owners to understand the company, including its strengths and weaknesses. We then tailor-make a Job Description, create an Ad based on the Job Description, post the Ad and receive resumes. We select the top resumes for a 1st interview and choose the top three for a second interview with the owners. Contact us to help you find your own professional management team!

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How To Hire A Ceo / Professional Management Team to Enhance Selling A Business

  1. 1. HOW TO HIRE A CEO / PROFESSIONALMANAGEMENT TEAM TO ENHANCE SELLING A BUSINESS Joe Rodwell ExitPlanning LLC 651 439-2375 www.ExitPlanningMN.com www.LinkedIn.com/in/JoeRodwell
  2. 2. Entrepreneurs Highly disciplined Hard working Willing to take risks Driven (sometimes to a fault)
  3. 3. “If you want your business to become more valuable, youmust become less valuable!”This is particularly challenging for entrepreneurs.
  4. 4. Value Drivers Focus on before-tax earnings that reflect future income growth Develop operating systems that sustain before-tax earnings Document sustainability of earnings Improve company performance measured by industry metrics Update facilities, equipment, and systems to state-of-the-art
  5. 5. Value Drivers (continued) Pay down debt, manage inventories – recognize obsolete items Solidify and diversify customer base Implement strategies to grow the company Build a solid management team – incent team to perform
  6. 6. Value Drivers (continued) Most Critical for 3rd Party Buyers: Pre-tax earnings – EBITDA Quality of existing management team, including – “will they remain?”
  7. 7. Core Competencies of a Successful Entrepreneur Leadership Operations Marketing/Sales Financial Management & Administration
  8. 8. Difference Between Entrepreneurial & ProfessionalManagement: Entrepreneurial Management - Company in which only owners/founders hold significant management positions. Professional Management - Company in which one or more non- owners hold significant management positions -- usually the non- owner manager has greater experience and/or training with meaningful methodologies in one or more of these areas: Operations Marketing/Sales Financial Management & Administration
  9. 9. Benefits of Professional Management:  Brings new disciplines and methodologies into the business  Relieves stressed owners  Mentors owner’s children  Can create considerable additional value  Facilitates multiple exit planning strategies
  10. 10. How Can a Business Owner Find Professional ManagementTalent? Own professional network Own direct advertising However, this is not in the owner’s normal area of expertise.
  11. 11. How Can a Business Owner Find Professional ManagementTalent? Hire an Executive Search Firm (they generally represent the CEO), or Select a Firm with Business Ownership Experience
  12. 12. Advantages of a Firm with Business Ownership Experience Complete Understanding 1. Leadership 3. Operations 5. Marketing/Sales 7. Financial Management & Administration We represent you, the business owner, not the CEO!
  13. 13. Advantages of a Firm with Business Ownership Experience(continued) Ask the right questions – and listen SWOT Analysis Job Description Advertisement Candidate Questions
  14. 14. Selection Process Create ad and gather resumes Interview top 8 Select top 3 for 2nd interviews Have top 3 complete Personality Profile – create own Profile Identity Perform background/credit checks Select top candidate – check references
  15. 15. Compensation Package Competitive Salary Bonus for EBITDA increases Phantom Equity Plan – with non-compete
  16. 16. Post-Hire Follow Up Introduction to the Company Announcement to the Industry Board of Advisors Meetings
  17. 17. Board of Advisors Meetings Purpose - Accountability Agenda for first 6 Meetings with new CEO performing these tasks: 5.Completion of SWOT Analysis 6.Reports on “due diligence” on the company 7.Gives Board detailed & unfiltered state of the company report 8.Presents proposed Strategic Plan for review & consideration 9.Presents next year financial projections and budget 10.New CEO creates Agendas at and after this point.
  18. 18. ABC Manufacturing Company Today Revenue - $10,000,000; EBITDA - $1,000,000 Value - $3,000,000 (lack of management team) Operations – Solid Marketing/Sales – Lacking Financial Management & Administration – Lacking
  19. 19. ABC Manufacturing Company Tomorrow Revenue - $30,000,000; EBITDA - $5,000,000 Value - $25,000,000 Operations – Solid Marketing/Sales – Solid Financial Management & Administration– Solid
  20. 20. Summary Entrepreneurs Value Drivers – Two critical 1. EBITDA 2. Management Team Advantages of Firm with Business Ownership Experience Board of Advisors Meetings

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