1. Taking the Next Step: Some Thoughts about SUCCESSION PLANNING prepared for the Principals, Directors and Managers of NAI Global Las Vegas January 2008

2. After a long flight, it is reasonable to expect a safe landing.

3. We want to prepare you for the transition of your business through successful exit or succession.

4. Some sobering statistics: Over the next decade hundreds of firms will transfer ownership through sales, merger or acquisition or close their doors altogether. Less than 20 % of independently affiliated firms set annual goals. Less than 5 % of independently affiliated firms have strategic plans. Reminiscent of the old law school warning: look to the left and to the right; in 5 years 1 of you will be gone.

5. Many of you are approaching a fork in the road with two strategic options: SUCCESSION or EXIT

6. You do, of course, have the option of playing it out to the very end. Nowhere is the old saying truer than here: failing to plan is planning to fail.

7. Two possible strategies: SUCCESSION: the ownership and management of your company is transferred to new owners and managers and you maintain some relationship with the firm. You are, however, slowly phased out by a successor or successors. This is achieved through the implementation of a 3 to 5 year plan. EXIT: the ownership of your firm is sold outright. In most cases you disassociate from your business totally.

8. Note: do not proceed without a personal financial plan! And start a conversation NOW with your spouse and children about the future.

9. This is the first decision of many you need to make about the future: DO YOU HAVE A NEED TO STAY INVOLVED?

10. The choice between succession and exit depends on a series of factors: FINANCIAL These factors are systemically inter-related. OPERATIONALPERSONAL MARKET

11. The Financial Checklist: determine your assets. determine your value assess the market (who would/could buy us?) assess different sell/buy-out strategies.

12. $$$$$$ FINANCES $$$$$$ Property and equipment Contracts Receivables People Relationships Good name, good will Brand Market position Determine your assets.

13. The question of valuation: Rule of Thumb = 4 to 5 times multiple of net revenues Future cash flow Are there buyers? Existing partners Brokers and employees Competitors mergers acquisitions Networks or national firms $$$$$$ FINANCES $$$$$$

14. The Operational Checklist: take a hard look at sustainability develop a phased-in plan of delegation find balance between being a lame duck and a fifth wheel.

15. Operations… Operations… Operations Leadership Potential partners Kids and other family members Administration Sales Staff the case of the 20:80 the case of the missing middle the case of the empty cooler Clients Issues of sustainability

16. Need to delegate. Need to find balance.

17. The Market Checklist: how will your clients react? are you connected to the next wave market? how will your competitors react?

18. The Personal Checklist: ƒ are you ready for this? mentally ready? financially prepared? can you let go? ƒ what does your spouse think? ƒ what do your heirs think? Legacy planning. ƒ START NOW!

19. VERY NEXT STEPS 1.Get your personal financial plan in order. 1.Determine what you CAN do with the firm. 2.Make a decision about what you WANT to do. 3.Set goals for where you MUST be in 3 years. 4.Take action.