By Peter Busacca, Washington BBI Is my business salable? By Peter Busacca, Washington BBI The balance beam is a great metaphor for the value of exit planning, and exit planning, at least in this context, is all about making your business enticingly salable. If you focus on the exit, you will likely get there. Focus on your toes, and what happens? Washington BBI

Is selling my only exit option? Dissolution / Liquidation Null exit – create a cash cow and milk it from afar COB Emeritus – shows up quarterly to bark License the IP or technology – IPO – “the genie in the lamp” - every tech start-up’s dream! Or sell the business Title Exit options Buyer types Buyer’s fears Strategic buyers Attributes Kissing pig Exit plans Value of exit planning Thank you! Alfred E. Neuman was the mascot for people with no plan. He would not exit plan. What about you? What are your options for exiting? Washington BBI

If you want to sell, who will buy? Five types of buyers Family Member Employees Competitor Investor: Individual? PEG? Strategic Buyer Title Exit options Buyer types Buyer’s fears Strategic buyers Attributes Kissing pig Exit plans Value of exit planning Thank you! If you intend to sell your business, who will you sell to? There five types of buyers. Period. Which is right for you? How do you prepare your business for sale for each type? Which one will pay the most for your business? Why? Washington BBI

What keeps buyers up at night? Title Exit options Buyer types Buyer’s fears Strategic buyers Attributes Kissing pig Exit plans Value of exit planning Thank you! If your business is mid-sized or larger, then another, larger firm will likely buy it. If you have a small business, then another individual is likely to buy it. Anything sellers can do to proactively reduce the buyer’s worries will make your business more enticing for sale. It may even increase the price paid. An individual buyer’s biggest fear is that they will totally mess up! Washington BBI

What do buyers look for? Attributes that entice: Earnings history Viable business model Strong management team Proven market Proven processes & systems Proven client relationships Strategic value Title Exit options Buyer types Buyer’s fears Strategic buyers Attributes Kissing pig Exit plans Value of exit planning Thank you! When buyers put your firm under the microscope, what do they look for? Washington BBI

Strategic value? Ability to plug holes in their product line or strategy Capacity: Manufacturing or Distribution Intellectual Property & Processes Leadership team & employee talent Location, location, location Process: Manufacturing or Distribution Product attributes Product: complementary sales Product: cross-sell opportunities Purchase material discount opportunities Secure customer base Secure vendor relationships Territory / Protected Markets Title Exit options Buyer types Buyer’s fears Strategic buyers Attributes Kissing pig Exit plans Value of exit planning Thank you! Firms with strategic value command above-market selling prices. What do you need to do to show future buyers that your company offer proven and exceptional strategic value? Washington BBI

Investors won’t kiss a pig! What symptoms warn investors off? Inconsistent earnings over past 5 years? No business plan? Poor targeting and execution? No or poor management team? Financials no one can trust? Unreported cash? Personal expenses on the firm’s P&L? No exit or business transition plan? Poor sales/marketing execution? No or bad operations or systems? No clear idea of what they are good at? Title Exit options Buyer types Buyer’s fears Strategic buyers Attributes Kissing pig Exit plans Value of exit planning Thank you! Buyers don’t want to kiss pigs. Is your business enticing? If not, get help from consultants or business brokers you can trust. Washington BBI

Exit planning helps owners to focus & to achieve goals Why exit plan? Who cares? Customers, Vendors & Investors: Want to do work with firms that will succeed. Lenders: Want to believe they will be paid back. You: Remember the balance beam? Eyes on the destination, you’ll succeed. Eyes on your toes – you will fall. Title Exit options Buyer types Buyer’s fears Strategic buyers Attributes Kissing pig Exit plans Value of exit planning Thank you! Ever feel like yours insides just want to scream? Exit planning can help. It is all about 1) building value over time, and 2) preparing your business to be salable to the kind of buyer your want to sell to. There are side benefits. Customers, vendors and enders want to do business with people who know where they are going. Exit planning helps owners to focus and succeed. Exit planning helps owners to focus & to achieve goals Washington BBI

Benefits of exit planning Focus on the destination and you will achieve it. Maximize business value and make more money. Reduce aggravation. Execute better. Sleep better. Reduce BSO Syndrome to manageable levels. Make your business enticing to: Investors Bankers Customers Business buyers! Title Exit options Buyer types Buyer’s fears Strategic buyers Attributes Kissing pig Exit plans Value of exit planning Thank you! Here are some of the benefits of exit planning. They all boil down to increasing value and efficiency as well as reducing aggravation and distractions. Washington BBI

Thank you! Peter Busacca, MBA Washington BBI Consulting@WashingtonBBI.com www.washingtonbbi.com 425/391-8720 Business transitions and transactions - the business brokers with the end-to-end solution! Title Exit options Buyer types Buyer’s fears Strategic buyers Attributes Kissing pig Exit plans Value of exit planning Thank you! It has been an honor to speak with you today. Thank you for your time and attention. Washington BBI