1. Value Driver Analysis

2. What We Know Your Business Is Your Future… Most owners want to leave their businesses within next 5-10 years. Most owners will never be able to leave their businesses in style. Most owners have no plan to grow value or to exit their businesses. Most owners work in, not on, their businesses.

3. The Market Value of Your Business Current M & A Marketplace 20 percent of businesses are for sale, but only one out of four actually sells. Businesses with sales of $10 million per year aren’t much better – only one-third sell. Above $10 million per year, the odds improve to 50-50.

4. Every business owner wants to receive the maximum amount of money in order to accomplish personal, financial, income and estate planning goals. “Beauty is in the eye of the buyer.”

5. This Value Driver Analysis will focus on: Identifying your Strategic Objectives Determining your current personal and business financial resources The specific areas in your business that you need to focus on to close the gap

6. What to Expect From the Value Driver Report: –Personal Financial Needs Projection –Estimate of Business Value –Immediate Recommendations to Build Business Value Business Structure Corporate Strategy Process/Systems People Financial Management Performance Review –Baseline for Ongoing GAP Measurement

7. Value Driver Analysis Result Example

8. Choosing your Exit Path - Selling to a Third Party vs. Transferring to Insiders As Yogi Berra said: “You've got to be very careful if you don't know where you're going, because you might not get there.”

9. Ability to sell and business value are determined by: –Intrinsic Value: the value drivers. –Extrinsic Value: the value the market places on the business. –Effectiveness of the sale process. Third Party Sales – Not Just About the Business “Making a mountain out of a mole hill”

10. Promote Value Through Value Drivers Focus on increasing cash flow. Develop operating systems that improve sustainability of cash flows. Document sustainability of earnings. Improve company performance as measured by industry metrics. Pay down debt. Restructure organization. Solidify and diversify customer base. Implement strategies to grow the company. Develop and protect proprietary technology. Build a solid management team and groom a successor.

11. Ownership Transfer to Insiders “Making a molehill out of a mountain.” Owners must understand the need to minimize income tax consequences to the buyer and seller by minimizing ownership value of the business.

12. By completing our Value Driver Analysis, we can establish your course, find ways to build value, and create a plan to exit your business in style. Create Exit Plan Build Value Drivers Create Course Correction

13. If you see ownership change in your future, we can help you plan towards a successful business exit. Call or visit us online to request a complimentary Value Driver Booklet. Phone 858-200-0900 702-892-9911 Website www.honeycuttsmith.com

14. Contact Us Honeycutt, Smith & Associates 4225 Executive Square Suite 955 La Jolla, CA 92037-9122 Phone San Diego: (858) 200-0900 Las Vegas: (702) 892-9911 Email Website info@honeycuttsmith.com www.honeycuttsmith.com Paul E. Honeycutt, CFP® Practitioner, and Ronald F. Smith, CLU, ChFC are Registered Representatives and Investment Adviser Representatives with/and offering securities and advisory services through Commonwealth Financial Network, member FINRA/SIPC, a Registered Investment Adviser, CA Insurance License No. 0728831, 0688599. Financial Planning offered through H.S. Financial, Inc. in the States of CA and NV.