The Business Growth Model - for business owners who want to achieve financial independence through business ownership.

1. The Business
Growth Model
A Comprehensive Business Plan
Designed to Attain Financial
Independence Through Business
Ownership

2. A. Model Goals and Objectives
Achieved
1. Financial Independence
2. Retirement and Estate Resources
3. Education
4. Business Growth
5. Business Succession – Leaving More Behind Than
What You Arrived With.

3. B. The Business Growth Model
Defined
 20% profit before taxes
 5 years to satisfy loan obligation
 500K in Revenues
 Easy to run – can insert people to operate business.
 Equity in first unit funds purchase of 2nd unit

4. C. Financial Statement Analytics
1. Profitability
2. Solvency
3. Sustainability
4. Return on Investment
5. PALLR Sequence of Ratio analysis

5. D. Ratio Analysis
Measure Ratio Measure Standard
(Sales - Operating expenses)
Operating Margin 40%
Sales
Profitability (Operating margin - Discretionary
Net Margin expenses) 20%
Sales
Receivables Revenues
4-5 times
Turnover Avg. accounts receivable
Activity Sales
Asset Turnover 5-7 times
Average Capital Assets
Total Debt
Leverage Debt Ratio
Total Assets
30%
Current Assets
Liquidity Current Ratio
Current Liabilities
2:1
Net Income
Return on Equity 20%
Shareholders' Equity
Rate of Return Net Income
Return on Assets 20%
Average Total Assets

14. D. Growth Model Analytics
What Do We Have At year 15?
1. $1.49 Million in the bank.
2. Annual salary of $120,000.
3. Asst. mgmt secured at each location.
4. Assuming market value = revenues, $2,373 Million in asset value
to facilitate retirement objectives.
5. All net income within the $500K Small Business Deduction Limit.
6. Ownership concentrating on:
 Management
 Marketing
 Strategy
7. Financial resources to extend business network.

15. Business Growth Model
3,000,000
2,250,000
1,500,000
$
750,000
0
Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Yr 12 Yr 13 Yr 14 Yr 15
Year
Revenues
Net income after taxes
Ending cash

16. D. Growth Model Analytics
• Optimal business parameters for the model.
-20% net income before taxes
-500K revenue levels
-Recession-proof industry
-Location
-Demographic of customers (margin vs. volume)
• Operational requirements.
-Staffing levels
-Ability to replicate management efficiencies
• Personal longevity, sustainability, and success.
-Strategy
-Intent of Business
-Job replacement

17. F. Final Thoughts
Future seminars in the NAVIGATOR series to
assist in finding and operating the right
businesses:
•BUSINESS AUDIT PROOF – securing your business against theft and
maximizing the effectiveness and efficient operation of your business
BUSINESS VALUATION – Determining The Proper Price To Pay For
Value.
FINANCIAL STATEMENT ANALYSIS – The Key To Finding Your
Profitable Businesses.
CORPORATE TAX PLANNING – How To Legally Keep As Much
Money as You Own.