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Business Continuation & Exit Strategies:

Business Continuation & Exit Strategies Presented By: Daniel Botha, MBA, BSc. Agric (Hons) Sun Life Financial

Facts:

Facts 3 of 4 business change hands - 5 to 10 years ahead Majority BABY BOOMERS know how to build - not to transition Focus day to day activities – lack of plan far ahead Involuntary sale , lack different lifestyle & safeguard wealth Failing to protect against DEATH, DISABILITY, INSOLVENCY Do not Underestimate impact small business on world economy N-America alone - 50% of GDP - 75% of all jobs KEY missing ingredient - COMMUNICATION

Three choices – in Selling a Business:

Three choices – in Selling a Business Find a buyer in the open market A member of the family / key employee to “buy” in Wind down - Sell the assets

A Buyer’s Perspective:

A Buyer’s Perspective Buyers have their own reasons why they buy May be interested in the assets, complimentary business, increase market share, synergies to merge, buy debt for income tax purposes, entrance into the market

10 Standard Criteria All Buyers Look At::

10 Standard Criteria All Buyers Look At:

1. All about risk & return:

1. All about risk & return

2. Client perception if the Owner is gone:

2. Client perception if the Owner is gone

3. Critical knowledge of empowered key people:

3. Critical knowledge of empowered key people

4. Branding of the business – why are franchises so successful:

4. Branding of the business – why are franchises so successful

5. Goodwill – procedure Manuals:

5. Goodwill – procedure Manuals

6. Future Strategic Growth & Profitability – 5year, 10 year plans – future market share:

6. Future Strategic Growth & Profitability – 5year, 10 year plans – future market share

7. Buyers pay for earnings & buy assets:

7. Buyers pay for earnings & buy assets

8. Due Diligence – poor bookkeeping & financial statements , taxes paid, earnings:

8. Due Diligence – poor bookkeeping & financial statements , taxes paid, earnings

9. Financing the sale – bankers support:

9. Financing the sale – bankers support

10. Run successful without the owner – the more likely to sell:

10. Run successful without the owner – the more likely to sell

Exit Strategy:

Exit Strategy Continuous Process - Part of the acid tests to keep the business on track for excellence