Succession
Masterclass
March 2018

Business Valuation
Tips and Traps

Intro
Date Topic
Feb 8, 2018 Why Succession Planning? Market research and
trends and The Psychology of Succession
Mar 8, 2018 Business Valuation Tips and Traps
Apr 12, 2018 Structuring for Succession – Who owns what?
May 10, 2018 Small Business CGT Concessions
Jun 14, 2018 Family Business Succession
Jul 12, 2018 Maximising Value – What are buyers worried about?
Aug 9, 2018 ESOP as a Succession Option
Sep 13, 2018 Strategic Sales – What are buyers attracted to?
Oct 11, 2018 M&A Process – Tips and Traps
Nov 8, 2018 Action Plan – How to help your clients and attract new
clients
Succession Masterclass Series

Craig West
CEO & Founder
B. Bus (Mgmt.), M. Bus (Acct/Fin),
M. Tax Law, CPA
Craig’s practice Succession Plus is the largest Business
Succession and Exit Planning firm in Australia and provides
mentoring, advice and strategy for clients looking to prepare their
business for a successful exit.
In March 2014, Craig was appointed Executive Chairman of the
SME Association of Australia, an organisation focused on
improving the success of SMEs in Australia.
In October 2014, he was awarded the Exit Planner of the Year at
the Exit Planning Institute Annual Conference in Texas, USA as a
result of his innovative development of an exit planning process to
help business owners maximise business value and achieve a
successful exit.
During 2015, Craig commenced a Doctor of Business
Administration on the topic of using Employee Share Ownership
Plans (ESOPs) as a Business Succession and Exit Planning tool.
Craig’s proprietary structure - a Peak Performance Trust - has
won the Australia-wide award for the Employee Share Ownership
Plan of the Year twice in four years.

Michael Vincent is a Chartered Accountant and Strategic Business Adviser who has amassed a wealth of
experience as both an External Business Consultant and Senior Executive of Corporate Australia assisting businesses
small and large to maximize business value. As a former Senior Investment Banker with a successful track record of having
advised businesses on buy/sell transactions totaling close to $2 billion (and counting), Michael provides invaluable insight
as a lead adviser and mentor on raising capital, acquiring for growth or realising the equity in your business.
Donald Poole started his career in 1974, starting at a suburban accounting practice. In 1980, he opened a
small office in Mooloolaba on the Sunshine Coast. The business expanded rapidly and in 1983 and 2007, the firm
moved premises to cater for its growth. Don’s personal business, The Poole Group, now has 7 partners, 38 technical
and 10 support staff and handles Taxation, Accounting, Audit, Business Management, SMSF and Investment and
Insurance Advisory Services. Don has assisted countless business owners through a successful exit, with his client
base representing a broad section of industry types and sizes.
Scott Patterson has extensive business and professional experience, including over 20 years as a principal of a
highly successful public accounting and financial planning firm. His passion is working with clients to improve the value of
their businesses, and create a more certain future for them, their stakeholders and their families. Scott utilises strategic
thinking, tailored advice and integrated solutions to enable business owners the freedom of determining the time frame and
method in which they exit from their business, often their most valuable asset. His expertise stretches across all areas of
small to medium enterprises (SME), including agricultural enterprises.B. Bus (Acct),
FCPA, GAICD
B. Bus (Acct),
M. AppFin, CA
B. Bus, CPA,
CTA
Succession Plus Partners

Succession Plus Accredited Advisers
We currently have 24 accredited advisers in most capital cities and
several regional areas/country towns who have been through our
training and accreditation program, and we are still actively recruiting
new advisers in many areas.
Please visit our page for more information:
https://services.successionplus.com.au/accredited-advisers-
recruitment/

Succession Plus’s
Proprietary 21-Step
Business Succession
& Exit Planning Model

Investing the time to develop a succession plan is on of
the most important financial decisions a business
owner may ever make.
Most people go into business not only to earn an
income but also to build the value to their equity and to
sell, but many business owners do not develop a
strategic plan for exiting their businesses. Without one,
the value in your business will retire when you do.
Enjoy It spells out a practical 21–step succession
planning process suitable for any business owner, no
matter what their circumstances.
Published Book -
ENJOY IT by Craig West

Published Book -
BUILD IT by Craig West
There are a number of key steps that business owners can
take to dramatically improve the financial performance of
their businesses. One of these is having an employee
incentive program that motivates staff to think and act more
like business owners and less like employees.
Build It is designed to give you an overview of the key
issues involved in implementing an Employee Share
Ownership Plan (ESOP), so that when you’re ready to talk
about how an ESOP can benefit your company’s growth
and profitability, you’ll have a good understanding of the
requirements and scope of the process.

Business
Valuation

• Valuation theory and methodology
• Assessing risk in SMEs
• Cost of Capital – Why is this important anyway?
• Reasonableness test
• Valuation case studies
Overview

Microsoft to Acquire LinkedIn for
$26.2 Billion
By Jay Greene
Updated June 14, 2016 12:58 a.m. ET
Microsoft Corp. snapped up LinkedIn Corp. for $26.2 billion in the
largest acquisition in its history, betting the professional social network
can rev up the tech titan’s software offerings despite recent struggles by
both companies.
The deal is Chief Executive Satya Nadella’s latest effort to revitalize
Microsoft. Mr. Nadella hopes the deal will open new horizons for
Microsoft’s Office suite as well as LinkedIn, both of which have saturated
their markets, and generally bolster Microsoft’s revenue and competitive
position.
Strategic valuation example

Apple acquires start-up Turi for
reportedly $200 million
By Jake Smith for iGeneration
August 7, 2016
Apple has acquired Seattle-based machine learning and artificial
intelligence startup Turi for around $200 million, as it looks to battle
Google, Amazon and Facebook in the artificial intelligence space.
The iPhone giant's shift into artificial intelligence was discussed by Tim
Cook, CEO of Apple, on the company's earnings call in July.
"We have been and continue to invest a lot in this," Cook said. "We are
high on augmented reality for the long run."
Strategic valuation example

Valuation Formula
“Price is what you pay,
value is what you get.”
- Warren Buffett

Valuation Formula
EBITDA x earnings multiple = Valuation
Earnings before interest, tax, depreciation and
amortisation
Normalised earnings – add backs, adjustments,
market salary etc.

Valuation EBIT Multiples
Source:
The ValueMyBusiness RMIT Index of Business Value Multiples, December Quarter 2017

Stage One –
INSIGHTS
Report

Company Structure

Current Business Structure

Suggested Business Structure

Financial Analysis

Profit & Loss Statement

Statement of
Financial Position
- Finance

Statement of
Financial Position
- Operations

Summary of Adjustments and Addbacks

Financial Trends

Trend Analysis

Financial Scorecard

Financial Scorecard

Financial Ratios

Financial Ratios

Breakeven Analysis

Breakeven Analysis

Non-Financial KPI Scorecard

Non-financial KPI
Scorecard

Non-financial Ratios

Exit Readiness & Attractiveness
KPI Scorecard

Exit Readiness
& Attractiveness
KPI Scorecard

Exit Readiness
& Attractiveness
KPI Scorecard
Results

Business Risk Assessment

Beta Factor
Assessment

Cost of Funding

Cost of Funding -
Weighted Average
Cost of Capital
(WACC)

Profitability Analysis

Profitability Analysis

Profitability Analysis

Business Valuation

Business Valuation –
Free Cash Flow
(FCF)

Business Valuation -
Future Maintainable
Profits (FMP)

Forecast –
Profit and Value
Potential

Conclusion

Accredited Adviser Recruitment
We are actively looking to recruit in the following areas throughout Australia. Visit our website
successionplus.com.au or email cwest@successionplus.com to find out more about this offer.
NSW
• Armidale
• Bathurst
• Bowral-Mittagong
• Coffs Harbour
• Dubbo
• Goulburn
• Hills District
• North Shore
• Orange
• Port Macqaurie
• Tamworth
• Wollongong
WA
• Bunbury
• Busselton
TAS
• Hobart
• Launceston
NT
• Darwin
VIC
• Albury
• Ballarat
• Bendigo
• Geelong
• Melbourne
• Mildura
• Mooroopna
• Shepparton
• Wentworth
• Wodonga
QLD
• Brisbane
• Bundaberg
• Cairns
• Mackay
• Rockhampton
• South Gold Coast
• Sunshine Coast
• Toowoomba
• Townsville
SA
• Adelaide

Adviser Masterclass Series

Don’t miss these upcoming webinars…
Register thru https://services.successionplus.com.au/events/
Date Topic
Apr 12, 2018 Structuring for Succession – Who owns what?
May 10, 2018 Small Business CGT Concessions
Jun 14, 2018 Family Business Succession
Jul 12, 2018 Maximising Value – What are buyers worried about?
Aug 9, 2018 ESOP as a Succession Option
Sep 13, 2018 Strategic Sales – What are buyers attracted to?
Oct 11, 2018 M&A Process – Tips and Traps
Nov 8, 2018 Action Plan – How to help your clients and attract new clients

Questions…

p 1300 665 473
e cwest@successionplus.com.au
w successionplus.com.au
Head Office
Level 3, 50 York Street
Sydney NSW 2000
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