Attracting Bankers/Investors With Your Financial Story Capaha partners llc Entrepreneurship Telling your story Attracting Bankers/Investors With Your Financial Story October 30 2017

Who is Capaha partners?   Committed to providing a focused and personalized approach for finding the best solution for financing, risk, insurance and investment management.   Capaha Partners LLC (“Capaha”) was founded in 2010, by Raullo and Gina Banks Eanes as a certified Minority Business Enterprise, providing business consulting, coaching and mentoring services to small and minority owned middle market sized companies. Capaha utilizes a collaborative branch of knowledge and resources among our service partners to provide the best alternative.   We have helped privately owned small business and middle market clients with annual revenue ranging from $1 Million to $60 Million. Industries serviced include manufacturing, distribution, construction, logistics and retail.

Commitment – Collaboration- Creativity Our credo What do we do Commitment – Collaboration- Creativity We provide open and frank discussion to assist target companies with the right support and structure. Our clients have invested their life savings, sweat equity and countless hours into making their dreams a reality.  It really is all about the company's needs for financing, risk management, insurance and investing. Capaha provides a focused and personalized approach to understanding financial and fiscal management needs.   We look at the situation from an ownership and financier perspective.   Because we are experienced Entrepreneurs, Banking and Financial services executives, we are able to use our carefully cultivated group of service partners to assist us in representing the client’s best interest and fulfilling the requirements and goals of financier.    We provide one point of contact, advocate and represent clients to the banking industry, financiers and insurance/surety companies.  

What Will We cover today? Why am I an entrepreneur? Telling your story. Understanding how the score is kept. What does a banker/investor look for when asking for your financial statements? The importance of reading, interpreting and selling your balance sheet. A return is a return. Just what is a reasonable return to an investor? Is your business a forever business?

How do you entice or tell your story? Main Components answer what’s in it for me History Walk through the garden of cashflow, earnings and changes in revenue Balance Who do you sell to, how much concentration and why do they buy from you. Who are you paying, (suppliers) and how are they treating you.

The importance of reading, interpreting and selling your balance sheet The balance sheet, together with the income statement and cash flow statement, make up the cornerstone of any company's financial statements. Bankers will use this information moreso than your income statement to make a decision.

What does a banker/Investor look for? Within all of that is YOUR story. Your financial as well as personal. What drives you and the business. What drives someone to invest one more dollar in your dream?

What does a banker/Investor look for? Blood? The life blood of the company, your sweat, tears and dreams. A banker is trying to size you up for advantages for both them and you. - A decent return on their investment (interest). - A great depository relationship. - Ways to loan you more money or help create wealth. Financial where with all, the ability to pay your bills and provide a reasonable payback to them as an investor. A clean and reputable house. Balance, trends and your future.

What does a banker/Investor look for? Investors are looking to be paid for their risk. Bankers returns are determined by: Your longevity in business EBITDA Debt Coverage Liquidity Let’s take a short spin through this example.

how is the score kept? Operating performance is often the misleading start. EBITDA + Cash Flow Adjusted EBITDA is Significant Cash Flow Most important ratio measures (Covenants) Debt Service Coverage (EBITDA/Total Debt Payments) Current Ratio (Current Assets/Current Liabilities) Tangible Net Worth ( Total Assets – liabilities – intangibles assets)

Is your business a forever business? Scalable? Saleable? Lifestyle? Wealth Accumulator? Generational?

Strategic business objectives Recapitalize Business for Sales Growth Strengthen Management and Corporate Systems Focused Approach to Sales Growth with Concentration on High Margin Opportunities Seeking All and in some cases MBE Participation Expand Sales and Marketing to other Regions – we are a global economy.

Recapitalize Business for Acquisition & sales growth Steps and Responsibility: Review financials and create projections to determine business capital needs. Analyze debt to determine proper debt load. Determine amount and sources of equity infusion. Identify proper corporate structure for company to succeed.

Strengthen Systems Review financial reporting systems Management: Corporate: Review processes, software and policy by customer. Review all high margin projects for the past two years. Review all low margin projects for the past two years. Review Inventory System, if material. Review financial reporting systems Review monthly budget systems Review labor management systems Review payroll system Review payables and receivables systems

Focused Sales growth Identify current customers and orders for current year and beyond. Reach out to potential customers for immediate business commitments, if company is Certified MBE. Reach out to State and Local Governments for Business commitments and incentives for job retention. Identify High Margin existing and new customers/markets for potential business.

Strengthen Operations & Management Team Identify current team for retention. Identify any new employees (consultants) and roles. Identify office/whse improvements to increase quality and capacity. Reach out to Unions for support. Develop communication plan to company customers, creditors and employees. Develop plan to address any customer services issues/concerns.

Your Business a Forever Business or just for lifestyle? What explains longevity? Stanford Graduate School of Business Professor Charles O'Reilly calls it "organizational ambidexterity": the ability of a company to manage its current business while simultaneously preparing for changing conditions. "You often see successful organizations failing, and it's not obvious why they should fail," O'Reilly says. The reason, he says, is that a strategy that had been successful within the context of a particular time and place may suddenly be all wrong once the world changes