11

22

33

$1,490,837At Age 68

$6,894,743At Age

94

44

How Much Do You Need to Live Happily Ever After?How Much Do You Need to Live Happily Ever After?

Your Business’ After-Tax Value TargetYour Business’ After-Tax Value Target

Your Rough Happily Ever After NumberYour Rough Happily Ever After Number $ ________$ ________

Less Your Target Personal Income Producing AssetsLess Your Target Personal Income Producing Assets (_________) (_________)

Your Business’ After-Tax Value TargetYour Business’ After-Tax Value Target $ $ ______________

Convert Your After-Tax Value Target to Pre-TaxConvert Your After-Tax Value Target to Pre-Tax $ $ ______________(Divide by 1 minus the anticipated effective tax rate)(Divide by 1 minus the anticipated effective tax rate)

Your Business’ EBITDA TargetYour Business’ EBITDA Target

Your Business’ Pre-Tax Value TargetYour Business’ Pre-Tax Value Target $ ________$ ________

Divided By Your Business’ Valuation MultipleDivided By Your Business’ Valuation Multiple ________ ________

Your Business’ EBITDA TargetYour Business’ EBITDA Target $ $ ______________

55

The Importance of Tracking Value

66

The Importance of Tracking Elements of Value

77

Transfer Option Value Transfer Option Value RangeRange

88

Transfer Options and Transfer Options and MethodsMethods

99

2xx9 2x10 2x11 FCST FCST FCST

NET INCOME (15% Growth) $ 6,250 $ 8,812 $ 12,507

ADD BACK:INTEREST EXPENSE 1,000 1,000 1,000 TAX EXPENSE 2,000 2,000 2,000 DEPRECIATION EXPENSE 12,000 12,000 12,000 AMORTIZATION EXPENSE 2,000 2,000 2,000

OWNERS PERSONAL EXPENSES ANDADJUSTMENTS FOR NORMALIZED PAY 0 0 0

EBITDA $ 23,250 $ 25,813 $ 29,507

INDUSTRY MULTIPLESLOW 3.0 3.0 3.0 HIGH 5.0 5.0 5.0

ESTIMATED ENTERPRISE VALUATIONLOW $ 69,750 $ 77,438 $ 88,521 HIGH $116,250 $129,063 $147,534

LESS: INTEREST BEARING DEBT ($30,000) ($35,000) ($40,000)

NET EQUITY VALUATIONLOW $ 39,750 $ 42,438 $ 48,521 HIGH $ 86,250 $ 94,063 $107,534

What might successful execution look like?

1010

Value managementValue management can be used to guide the business can be used to guide the business towards its value target within the desired time frame. towards its value target within the desired time frame.

Leadership, incentive systems and reliable reporting Leadership, incentive systems and reliable reporting systems help create the framework necessary for systems help create the framework necessary for sustainable growth.sustainable growth.

Link Exit and Business StrategyLink Exit and Business Strategy Align management objectives and compensationAlign management objectives and compensation Improve your information reportingImprove your information reporting Plan to achieve a higher valuation multiplePlan to achieve a higher valuation multiple

And don’t forget to:And don’t forget to: Obtain higher investment rates of returnObtain higher investment rates of return

1111

Protect the valueProtect the value created through risk management created through risk management and tax minimization strategies.and tax minimization strategies.

Review the Business Risk Management ChecklistReview the Business Risk Management Checklist Review the Business Contingency Planning ChecklistReview the Business Contingency Planning Checklist Tax MinimizationTax Minimization

-Strategic Uses of Cash-Strategic Uses of Cash-Estate Planning-Estate Planning

1212

Manage the Planning and Implementation ProcessManage the Planning and Implementation Process

Exit planning requires the participation of multiple Exit planning requires the participation of multiple parties who are informed and work together. parties who are informed and work together.

Advisory TeamAdvisory Team Project Managers – Internal/ExternalProject Managers – Internal/External CPACPA BankerBanker M & A AttorneyM & A Attorney Estate Planning AttorneyEstate Planning Attorney Insurance AdvisorInsurance Advisor M & A Specialist/BrokerM & A Specialist/Broker Investment AdvisorInvestment Advisor Financial PlannerFinancial Planner OtherOther

1313

Thank You!