Exit Planning: Preparing yourself and your business for transition
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Knowing when and how to exit a business is more important to every business owner. An exit plan is best designed when you start the business. In this powerpoint, learn the 3 key points to planning for this transition and what you should consider when planning an exit. http://sellyourbusinessflorida.com/exit-planning-preparing-yourself-and-your-business-for-transition/
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Exit Planning: Preparing yourself and your business for transition
- 1. PREPARING YOURSELF AND YOUR BUSINESS FOR TRANSITION Kimberly Deas Business Transfer Specialist Murphy Business and Financial Services www.SellYourBusinessFlorida.com 1
- 2. My Story • Ran $16M Marketing Business • Burned Out • Equity was Negative • Walked away from Multi-Million Dollar Business • Decided business owners deserved to know • GOAL: Educate you on business value and transfer process www.SellYourBusinessFlorida.com 2
- 3. Everyone EXITS their Business VS. www.SellYourBusinessFlorida.com 3
- 4. Business Transfer Cycle From Rob Slee, author Private Capital Markets U.S. Ten Year Transfer Cycle Deal Recession Prime Selling Time Uncertainty 1980 1990 2000 2010 BUYBUY 1983 1993 2003 2013 SELLSELL 1988 1998 2008 2018 1990 2000 2010 2020 www.SellYourBusinessFlorida.com 4 Baby Boomer Bulge is Coming
- 6. • What do you want to achieve with your exit? – Continuation of business – Financial Security – Asset Diversification – Reward Key Employees – Orderly Transition to Family – Fast sale (forced out) www.SellYourBusinessFlorida.com 7
- 7. To Prepare: •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? www.SellYourBusinessFlorida.com 8
- 8. • What % of your total net worth is tied up in your business? • What is your “Value Gap?” – The difference between what you need to fund your post exit/transition lifestyle and your current savings. www.SellYourBusinessFlorida.com 9 To Prepare: Meet with your financial planner NOW
- 9. Sell ZoneSell Zone Unsellable ZONEUnsellable ZONE To Prepare: - Review Checklist to Add Value -Get Valuation (ASAP) -Clean Up Books and Records www.SellYourBusinessFlorida.com 10
- 10. • How are you going to Exit? – Gift the business to family member – PEG Recapitalization – Sell the business • Outside buyer / • Management / Employees (ESOP) – Liquidate the assets – Take it with you to the grave – Win the lottery and just walk away from it all www.SellYourBusinessFlorida.com 11
- 13. It’s never too early to begin this type of planning, but it could be too late. www.SellYourBusinessFlorida.com 14
- 14. Next Steps Online Sellability Test (message me) and Download our free report on “7 Critical Points Every Business Owner Must Know Before Selling Their Business” http://bit.ly/LxKnN8 www.SellYourBusinessFlorida.com 15
Editor's Notes
- Everyone exits their business is that true? I never thought so. I was living in Europe and together with my husband we ran a successful $16M marketing business. We doing very well, and loved what we were doing, UNTIL.,… I got burned out and wanted to come back to the US. We tried living in two countires and it didn’t work, he wouldn’t leave Europe, we were getting divorced, but what about our baby – the business??? We had no plan and I knew nothing about exiting a business, I never expected this… He was more savvy financially than I was and he told me a business is worth the equity you have in the business, and my equity was negative, so to leave, I needed to pay him… So graciously agreed to agree my payment and let me out… I did not know it at the time, but I walked away from a multimillion dollar business, but I did not understand how to transition a business.
- Feet first or heard first
- Will you “work until you die” – great idea – but what about the unexpected? Disability? Market changes? Type writer repair person… Get you ready -= you are in control – something happens (buy- sell, take over if you’re not there) risk factors too high. Sellabiility score.
- Story: Edgewood – “84% of business owners stated that the proceeds from the sale of their business were important to their retirement plans.”
- Crocs were born in 2002 as boating footwear. Unfortunately, they didn’t stay at sea for long. Lauded for being supremely comfortable, the shoes soon became a favorite of “crocophile” celebrities like Jack Nicholson, Al Pacino, and chef Mario Batali, who has a Crocs line named after him. George W. Bush, too, wore the shoes in public (another reason he’ll forever be on the wrong side of history). By 2005, the company was producing a million shoes a month, and by 2007, had hit $850 million in annual sales. But by 2008, Croc-love was waning as consumers slowly came to their senses, and the company suffered a major drop in sales. They tried hard to regain their former glory by expanding their design selections: they made high-heeled leather Crocs, wedges, sneakers, winter boots, and leather boating shoes. The strategy worked, for a while--in 2011, they made $150 million in profits--but ultimately proved to be overexpansion. They’re now cutting the leather boots and dress shoes, and downsizing the company to survive--layoffs include 70 jobs at their Colorado headquarters. "We have a clear, well-defined strategy for addressing these issues and improving performance,” company president Andrew Rees said in a statement. “Work is under way already to drive significant change throughout our company.“ http://www.fastcodesign.com/3033447/fast-feed/could-this-finally-be-the-end-of-crocs
- Right now, due to the recent recession, I am seeing get me out at highest price.
- Executing a plan to exit takes time, thought and advisors.
- SLOW!!! Interested in selling – complimentary confidential meeting