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1
Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
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Becoming
Big Picture Advisors llc www.bigpictureadvisors.com
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If you don’t know where you’re goingYou could end up someplace else.
Yogi BerraAmerican Philosopher and Hall of Fame baseball player
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Story of Pat – Business Owner• Started Business 20 years ago• No succession or exit plan in place• Net worth is over $2mm• Has less than $250K saved for retirement• Pat has lost the drive and is essentially coasting• Business is mature and beginning to decline• Pat is consumed with running the business. • J. would love to win the lottery. Today!• Pat is STUCK in the Business
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Agenda Topics• Why are you in Business?• What is an Exit Strategy? Why is it important?• What stage of your Business Life Cycle are you at?• What is a Value Gap?• Why it’s critical to build a strong Business Core.• Business Valuations – It’s not straightforward• Exit Options – Internal, External• Assemble the right team of advisors• Take Control - Now
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
How we get Stuck in our Business
• No vision or plan for the business• Having too much of our wealth tied up in the
business• Using the business as a personal ‘piggy bank’• Our personal identity is linked to our business• We have not developed other interests and
hobbies.
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
How we get Stuck in our Business• Tiredness, lack of passion • Wearing too many hats• Paralyzed from too much stress• External market dynamics• “Firefighter” mentality – Always putting out fires• Lack of Vision• Lack of strategic planning• Being scared to make changes (getting too
comfortable)
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Get Uncomfortable – Get Unstuck• Develop a Golden Circle – Start with Why• Create an exit or transition plan • Implement with a passion• ‘Break the Tape’ – Accelerate through your
exit.
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Start with Why Do you still know why you are in Business?
• Why are you in business?• Why did you start or buy the business?• What are your goals? • What makes your happy & satisfied?• Why do your customers do business
with you?• Why would anyone want to buy your
business?
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Start with Why Do you still know why you are in Business?
• Lifestyle – Can’t work for “the man”?• Pursue a dream/passion?• No one will hire me?• Create wealth for Retirement?• Purely an investment?
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Don’t get Stuck in a maze without a growth and exit plan
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Planning Your Exit
Did you have a plan when you started your business or career?
Do you have a plan to exit your business and protect your wealth ?
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Your hard-earned wealth can be diminished by:
Changes to your business
What is at stake ?
Income & Estate Taxes
Lack of a Successor
Changes to the global economy
Deal Structuring & Advisory Fees
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
The average business owner spends 80 hours preparing a business plan and only 6 hours preparing for their
exit.
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
The longer you wait to develop an exit, the greater the risk and possibility that you will not succeed in protecting and extracting the wealth you created.
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
2007 ROCG Survey of 502 business owners in U.S. and Canada
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
2007 ROCG Survey of 502 business owners in U.S. and Canada
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Provided by Rob Slee
Sales of businesses occur in cycles
Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com 20
• How many businesses exist in the United States today?
Non-Employee Firms: 17,646,062
1 – 19 Em’ees
20 – 99 Em’ees
4,320,290
508,249
100 – 499 Em’ees 82,334
500 – 999 Em’ees 8,326
© 2010, Pinnacle Equity Solutions
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
How are you going to Exit?• Sell the business to outside buyer• Sell the business to management• Gift the business to family member• Liquidate the assets • Take it with you to the grave• Win the lottery and just walk away from it all.
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
What is an Exit Strategy?The written goals for the succession of a business’ ownership and control, derived from a well thought out and properly timed plan that considers all factors, all interested parties, and the personal goals of the owners in a manner and a time period that is accommodative to the business, its shareholders, and potential buyers.
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
It Starts with Creating a Plan and a Process
Financial Readiness
Identify Type of Exiting Owner You Most Resemble
Learn & Choose Your Exit Option
Execute Your Exit Strategy – Protect & Extract Your Wealth
Understand the Value of the Option You Choose
Set Exit Goals
Mental Readiness
1.
2.
3.
4.
5.
6.
© 2010, Pinnacle Equity Solutions www.pinnacleequitysolutions.com
Business Readiness
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
What do I want to achieve with my business exit ?
The “Why” questions
Step 1: Setting Exit Goals
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
When you begin to think about exiting your business, you need to consider whether you view your business as a
job or as an investment
Step #2: Mental Readiness
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
• Are you addicted to your business?
• Is your business a job or an investment?
• How involved are you with the day-to-day running of the business?
• Do you know what you would do if you weren’t in business?
• Are you ready to let go and let someone guide you through the transition?
Step #2: Mental Readiness
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
• Can you afford the Exit Option that I most want ?
• What % of your total net worth is tied up in your business?
Step #2: Financial Readiness
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
“84% of business owners stated that the proceeds from the sale of their business were important to their retirement plans.”
2007 ROCG Survey of 502 business owners in U.S. and Canada
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
What is a Value Gap?
The difference between what you need to fund your post exit/transition lifestyle and your current savings.
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
What is a Value Gap?Asset Base Required
Current Level of Savings
Value Gap
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
What are your assets?Liquid • Retirement Savings (IRA’s, 401K’s, Simple, SEP)• Cash• Non Retirement Savings • InsuranceNon-Liquid• Real Estate (Primary & Investment R.E.)• BUSINESS VALUE
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Fixed Income Private
Company90%
Equities
Fixed Income
Equities
PrivateCompany
20%
Typical Owner Allocation
Desired Financial Allocation
Beach House / Boat
How will you achieve diversification ?
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
How to Close the Value Gap?
• Save More• Reduce Post Exit/Transition Life Style/Needs• Grow Company Valuation (business growth)• Buy Winning Lottery Ticket• Hope your Children Create the next Facebook or
Google.
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
• How prepared is your business for an exit?
• How healthy is your business?
• What part of the business life cycle are you at?
• Do you know how to grow your business to increase its valuation?
• Is your management/personnel motivated or incentivised to stay?
Step #2: Business Readiness
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Step #2: Business Readiness
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Step #2: Business Readiness
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Step #2: Identify if your business is ready
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Why Business Growth is Critical to getting to a successful exit.
• Creates a strong Business Core• Creates leverage for a stronger exit/transition• Creates renewed passion and focus for the business• Creates basis for long term earnings and cash flow
growth• Creates positive momentum for company and brand
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
What is your Business CORE?A Business has 3 componentsA. Skeleton (Business
Structure/Operations)B. Muscle
(Products/Services/Processes)C. Skin (Brand Equity, Public Presence)
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
What is your Business CORE?
CORE =Comprehensive
OperationalEfficiencies &Resources
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Step #3: Identify What type of Owner you most resemble
•The “Get me out right away for the most money” exiting owner,
•The “Well-Off But Choose to Keep Working” exiting owner,
•The “Stick Around and Grow the Business” exiting owner, and
•The “Rich and Ready to Leave” exiting owner (can use any option).
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Step #3: Identify What type of Owner you most resemble
•The “Get me out right away for the most money” exiting owner,
•The “Well-Off But Choose to Keep Working” exiting owner,
•The “Stick Around and Grow the Business” exiting owner, and
•The “Rich and Ready to Leave” exiting owner (can use any option).
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Step #3: Identify What type of Owner you most resemble
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Step #4: Five Primary Exit Options
4. Management Buyouts
5. Gifting Programs/Family Succession
3. Employee Stock Ownership Plans (ESOPs)
2. Private Equity Group Recapitalizations
1. Sale of the Business
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Step #4: Five Primary Exit Options
Exit Options and the Exit Quadrant Chart
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Step #4: Five Primary Exit Options
Owner Readiness and the Exit Quadrant Chart
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Step #5: Understand the Value of Your Exit Option
Business Valuations
• Range of Values depending on exit options• Different valuation methods can apply• Not all value can be realized at time of exit• Valuations can change quickly and dramatically
based on market dynamics
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Gifting
Management Buyout
Employee Stock Ownership Plans
Recapitalization
Sale to an Outside Buyer
Synergy Value
Investment Value
Investment Value (structured)
Fair Market Value
Fair Market Value
Range of Values
Liquidations Asset Value
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Step #6: Execute/Implement Your Plan
• Assembly an advisory team• Share your plan with all stakeholders• Continuously revisit your plan as business,
financial and mental readiness conditions change
• Don’t procastinate – Don’t let your plan collect dust on a shelf - Take Control Now.
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Step #6: Execute/Implement Your Plan
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Business Owner
Exit Strategies
Advisor
Legal Advisor
C.P.A.
M&A Advisor
Insurance Advisor
Deal Structuring / M&A Process
Legal Agreements, Estate Planning
Taxes, Financials
Estate Planning, Wealth Protection
Business Growth
Business CORE
Growth
Consultant
A Typical Exit Advisory Team
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Big Picture Advisors llc www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
“It’s never too early to begin this type of planning, but it may certainly one day be too late.”
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Summary
Get Unstuck - Take Control Now
• Understand your “Why” factors• Determine your mental, financial and business
readiness• Create a strategic plan of action• “Grow” to Exit and beyond• Assemble the resources/team that will assist you in
executing and reaching your objectives
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Learn More
Download the White Paper
www.bigpictureadvisors.com
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Help! I’m Stuck in my BusinessLessons in Business Growth & Exit Planning
Big Picture Advisors llc www.bigpictureadvisors.com
Thank you . . .. . for attending. If you would like any further information about
our Business Growth & Exit Strategies solutions for your personal or business needs, contact us for a free initial consultations.
We will be happy to meet with you.
Big Picture Advisors - (843) 216-2493www.BigPictureAdvisors.com