A L A N C R E E D Y

A Business Roadmap

To A Successful Exit

14108 Allison Dr

Raleigh, NC 27615

Phone: 919.926.0688

E-Mail: alan@alancreedy.org Web: www.alancreedy.org

All Rights Reserved

Formostofus,gettingreadytoexitourbusinessisunlike anything we have ever done before. Manybelieveitshouldbeanunemotionalbusinesstask…butitisnotandcannotbe.Most of our adult life has been spent nurturing ourbusiness and so our emotions are inextricablyintertwinedwith it. Formany in funeral service it isalso the culmination of multi-generational stories.Stories of hard work, sacrifice, risks taken, victoriesanddisappointments…smallandlarge.Inallrespects,exiting your business…your career…is a momentouslife transition no matter how well we prepare. Weignoretheemotionalsidetoourperil.It is also inevitable. According to the BusinessEnterprise Institute some 69% of business ownersplan to exit within the next 10 years. Of these, 85%have no one yet in place that can replace their skillsand responsibilities. The reality is that100% of uswillexitourbusiness…willinglyornot.PreparingtoexitThis is a process best approached as answers to aseriesofquestions:

1. Ismytimingright?ü Am I still passionate or just going on

momentum?ü Are there imminent challenges that will

tax our resources or people beyond ourabilities?

ü If I was independently wealthy would Istillwanttodothis?

ü IfIsold:o WouldIjustwanttoleave?o WouldIwanttostayon?

2. Whatismybusinessworth?ü CanIbuildvalue?How?ü Do I need time to pay down long -term

debt?What’smyplan?ü Isthebusinessworthasmuchtodayasit

everwillbenomatterwhatIdo?

3. WhatdoIneedforretirement?

ü How big is the gap between what I willhave in personal resources and what Ineedfromthebusiness?

ü WhatdoIneedAFTERTAXES?4. If Ihadachoice is theresomeone Iwould

liketosucceedme?√ Canmychildrenaffordit?

o HowdoIgetthemready?√ Canmyemployeesaffordit?√ Is there a competitor / colleague /

partnerwhowouldwantit?√ Howwouldathirdpartylookatit?

5. What do I need to do to get it ready forsale?

√ HowcanIgetthebestprice√ HowcanIincreasethe“curbappeal”?√ HowcanImakemyselfunnecessary?√ HowlongamIwillingtowait?

6. WhatcanIdotomitigatetaxes?√ Whatisthebestdealstructure?√ CanI/shouldIleasetherealestate?√ AmIbetteroffwithalowerpriceand

abiggerdeferredcompensationplan?√ WithstaffandchildrenhowcanIgift

stock?ShouldI?7. IfIselltomychildrenshouldIincludenon

–participatingchildreninownershipof:√ Thebusiness?√ Therealestate?√ Bothorneither?

All this boils down to The Three UniversalObjectives:

I. Howmuch longer do I want to…or haveto…workinthebusiness?

II. What annual after tax income do I needforacomfortableandsecureretirement?

III. To whom do I want to transfer thebusiness?

This, in turn, translates into Three UniversalRequirementsfortransferringthebusiness:

I. AcapablesuccessorII. ApreparedBusinessIII. AreadyOwner

It’s Not Business…It’s Personal

A P u b l i c a t i o n o f C r e e d y & C o A l l R i g h t s R e s e r v e d

Most of us spendmore time thinking aboutwhatwewanttostopdoingthanwhatwewanttostartdoing.BigMistake!Retirementmaybeaneventbutsellingortransferringyourbusinessisaprocess.

Iusea3-phase,seven-stepprocesstoenableyoutobeclearaboutwhatyouwantanddecideon thebestwaytogetthere.

OurThreePhase,Seven-StepProcess:

Steps 1 & 2: DefineObjectives and Resources

– The single most important question after “what do Iwant?”is:“whatdoIneedfromthebusinesstogetthere?”This is the minimum amount defined by the differencebetween what you need for retirement and what yourpersonal resources will provide. With this information wehave a defined target that, in turn, tells uswhetherwe arereadynoworhaveworktodototheaftertaxcashwemusthave. This involves your financial planner and me in acomprehensiveassessmentofyourretirementneedsandthestateofyourcompany,includingitscurrentvalue.Thisstepresultsinareport(oftenmorethan75pages)thatoutlines: a.Yourbasicgoalsandobjectives

b. Your present resources and the Gap your after taxyieldmustfill

c.Unresolvedissues d.Yourpreferredsuccessor(ifany) e.Yourtimeline f.Valuation

g.Youradvisorteam1. Lawyer2. Accountant3. FinancialPlanner4.Insuranceadvisor

Step3:PreservationandMaximizationofValue–Afew funeral homes today are growing in value.Unfortunately,changesinourmarkethaveresultedinmanyfuneralhomesstrugglingtoremainstable.Somearedeclininginvalue.Ourfirstpriorityistostopanydecline and correct any cash flow issues. Theassessment defines the actions necessary and themethodsforimplementingthem.

Steps 4 & 5: SuccessionStrategy – The final exit

strategyisdependentontheultimatesuccessor.Thereare4basicwaystoexityourbusiness:

1. Selltochildren2. Selltoemployeesorpartner3. Selltooutsiders4. Liquidation

As transfers to insiders the strategy for selling tochildren, employees and partners have similarities.They often differ, however, in both structure and taxopportunities.A sale to outsiders requires a careful phasedexecutioninordertopreserveandmaximizevalue.Step 6. Business Continuity – While thedevelopment of a plan takes months, the process oftransition (especially with children and employees)can takeyears.Webelieve thatuntilyourpayment issecured you should not give up majority control.Circumstances like death and illness can suddenlymake it impossible for you to continue to play aprimary role. We help you develop a plan that will,again, preserve andmaximize value in the event youcannolongerparticipate.

Step 7. Wealth and EstatePlanning–With thehelpof

youradvisorteamwewillhelporchestrateaplanformanaging your estate, equalizing value for non –participatingchildrenandsecuringacomfortablesaferetirementforyourfuture.

Your Roadmap

Preparation:

Succession:

Postsale:

A P u b l i c a t i o n o f C r e e d y & C o A l l R i g h t s R e s e r v e d

AlanCreedyhasadegreeinPsychologywithaCertificateinPublicAccountingwhobeganhiscareerasa“trouble-shooter”foradiversifiedholdingcompanywithinterestsinbanking,equipmentleasing,lightmanufacturing,insurance,business-to-businessandbusiness-to-governmententerprises.Helearnedtoquicklyanalyzecoreproblems,developandprioritizesolutionsandimplementstrategiesforquickturnaround.

HebeganhiscareerinDeathCarethirty-fiveyearsagoasPresidentofthefinanciallydistressedOGRServiceCorporation,thefor-profitarmofTheOrderofTheGoldenRule.AfterfiveyearsandthesuccessfulrebirthofthecompanyheacceptedaninvitationtobecomePresidentofBrown-WynneFuneralhomesandcemeteries.Therehebuiltuponthealreadysuccessfullegacyofahighlyrespectedcompany;ultimatelyorchestratingthesaleofthecompanyin1990for10.5timesEBITDA.DuringthisperiodheandMr.WynneacquiredJ.J.FallonCompany,the28thlargestretailfloristintheFTDnetwork.Hereorientedthecompanystrategyandcreatednewgrowthandvalue,and,atthesametime,hedevelopedaninnovativemethodofcontrollingcost-of-goodssoldthatenabledthecompanytosignificantlyincreaseprofitability.Aftertheturnaroundthecompanywassoldtoaprivateequityfirm. AfterthesaleofBrown-Wynne,Mr.CreedybecamepresidentofTrust100,acompanyhehelpedfoundin1985.Aspresidenthebuiltthecompanytobecomeoneofthelargestpreneedmarketingcompaniesinthenation.Hesoldthecompanyin2008SincethesaleofTrust100Mr.CreedyhasbuiltasuccessfulconsultingpracticefocusedontheDeathCareindustry.Heisanacknowledgedexpertinfuneraloperations,finance,staffandculturaldevelopmentandleadership.HeisalsoanexpertinpreneedmarketingandsalesHeisafrequentcontributortoindustrytradejournalsandconventionspeakerandrecentlyservedasChairmanoftheFuneralServiceFoundation.HisIslandsofExcellence©LeadershipDevelopmentProgramsandBlueOceanTourshavehelpedindependentfuneralprofessionalsacrossNorthAmericamakepositiveandprofitablechangestotheirbusiness.CertificatesandAccreditations:CertificateinPublicAccountingUniversityofIllinois1978CertificatetoadministerandinterprettheBenchmarkLeadershipAssessment CenterforCreativeLeadership2008CompletedtrainingforadministeringVisualExplorertoolsforleadinggroupdiscussiononsensitivetopics

CenterforCreativeLeadership2009AccreditedbyHumanSynergisticsInternationaltoadministerandinterpret: OrganizationalCultureInventory OrganizationalEffectivenessInventory LeadershipImpactassessment Managementimpactassessment LifeStylesInventoryCertifiedExitPlanner-BusinessEnterpriseInstitute2015