Realising Business Value

Exit Strategy Planning

September 2008

Realising the Full Value of Your Business

Realising Business Value

Agenda

Why have an exit strategy? What is getting in your way? What is involved? Timescales Benefits of planning ahead


What is value? Courtesy dictionary.com

1. relative worth, merit, or importance: the value of a college education; the value of a queen in chess.

2. monetary or material worth, as in commerce or trade: This piece of land has greatly increased in value.

3. the worth of something in terms of the amount of other things for which it can be exchanged or in terms of some medium of exchange.

4. equivalent worth or return in money, material, services, etc.: to give value for value received.

5. estimated or assigned worth; valuation: a painting with a current value of £500,000.

6. denomination, as of a monetary issue or a postage stamp. 7. values, Sociology. the ideals, customs, institutions, etc., of a society

toward which the people of the group have an affective regard. These values may be positive, as cleanliness, freedom, or education, or negative, as cruelty, crime, or blasphemy.

8. to calculate or reckon the monetary value of; give a specified material or financial value to; assess; appraise: to value their assets.

9. to consider with respect to worth, excellence, usefulness, or importance.

Why have an exit strategy?

Money security family

Recognition Freedom

Control decisions to best exploit your skills work/life balance

REALISE YOUR GOALS


What is holding you back?

Readiness of you Loss of control Loss of identity

Readiness of rest of shareholders Logistical issues

How do you sell? Impact of competitors Impact on staff


What is holding you back? (cont’d...)

Unrealistic views Company’s value Company’s prospects

Succession management Parental issues What do you do next?


Does exit seem like an impossibility?

UnrealisticExpectations

Poor PensionArrangements

Good Profits

Fear of Unknown

Nosuccessors

in place

Ambitions No personal

plans

Pride/Identity

Responsibility for Staff

Trappedby the

business

Key drivers?

HSBC survey – 2006/7

Family is the key driver (70%) work (6%) – defines

who we are – conflict between time at home/work?

Age 70 is the new 50 - change in our attitudes, needs &Life Expectancy (increased by 30+ years since 1900, 8+ years since 1970’s)

Who’s in old peoples homes?

4% of people aged 65-69 7% of those aged 70-74 live in sheltered accommodation

Age 85 1 in 5 chance (20%) Age 75 – 84 4% chance long stay hospital >84 19% chance of long stay hospital The rest are either living at home on their own

or living with family……..How will you manage your business and care for elderly relatives? * Source The Hartford May 08

What is involved?

You & Your Company

PeoplePersonal

& Corporate Finances

Business

Full review and guidance on


Review Business

Shareholder's Objectives

Business Plan

Competition MarketCompany

Key Issues (SWOT)

Detailed Action Plan


Action without vision is only a way of passingthe time

Vision without action is only a dream

Vision with action can change the world


Nelson Mandela

Review People

Company

Management Development

Succession Planning

Basics (employment law)

Engagement

Communication

Performance Management

Employee Well-Being

Retention ‘Employer’ Brand Compensation & Benefits


All the world's a stage,And all the men and women merely players;They have their exits and their entrances;And one man in his time plays many parts,His acts being seven ages. At first the infant, InfancyMewling and puking in the nurse's arms;Then the whining school-boy, with his satchel ChildhoodAnd shining morning face, creeping like snailUnwillingly to school. And then the lover, AdolescenceSighing like furnace, with a woeful balladMade to his mistress' eyebrow. Then a soldier, Young adultFull of strange oaths, and bearded like the pard,Jealous in honour, sudden and quick in quarrel,Seeking the bubble reputationEven in the cannon's mouth. And then the justice, Adult - MaturityIn fair round belly with good capon lin'd,With eyes severe and beard of formal cut,Full of wise saws and modern instances;And so he plays his part. The sixth age shifts Old ageInto the lean and slipper'd pantaloon,With spectacles on nose and pouch on side;His youthful hose, well sav'd, a world too wideFor his shrunk shank; and his big manly voice,Turning again toward childish treble, pipesAnd whistles in his sound. Last scene of all, The EndThat ends this strange eventful history,Is second childishness and mere oblivion;Sans teeth, sans eyes, sans taste, sans everything.


Shakespeare’s Seven Ages Of Man - As You Like It – Soliloquy - Act 2 Sc 7 Jacques

A few facts…….

UK state pension age - 65 to 68 2024 and 2046 £540k today provides £1,500 pm net of tax

(RPI indexed) for 65 yr old couple** At 60 a man can expect to live for another 20.2

yrs and a woman another 23.4 yrs

** Source FSA Money Made Clear website May 2008

Review Personal & Corporate Finances

Company

Complete Integrated Financial Planning(Gap Analysis)

• Family

• Corporate

5 Key Elements

Benefits

• Director

• Employees

Treasury Management

Banking relationships

Tax Planning

Share Structuring

Corporate Will

Guaranteed Market for shares

Key People

Locked in

Protected


Timescales

Life and Business Business 3 years ahead of sale begin exit plan strategy

(may need 5 years if complicated) 1 year approx. to complete sale process

(if choose) Identify potential buyers Due diligence (buyer on you and vice versa)


Benefits of Planning

Increase your company’s value Lower liabilities and reduce issues Attract more buyers Break ceiling price? Faster sale Limits broken sale negotiations Keeps you focussed

CONFIDENCE YOU MEET YOUR GOALS


Summary

Business People Personal & Corporate Finances

A holistic approach working to your strengths

Realising Business Value SM Mentors beststart HUMAN RESOURCES Kellock Wealth Management


Regulatory Statement

This presentation should not be construed or taken as advice. General principals have been considered. Your individual circumstances should be taken into account before any action is taken.

Kellock Wealth Management is a trading style of Trinity House Financial Planning Ltd:

Highland Suite

Great Hollanden Business Centre

Mill Lane, Underriver

Sevenoaks

Kent, TN15 0SQ

which is authorised & regulated by the Financial Services Authority 439073

Registered in England 4740530 | Registered address as above


Realising Business Value

Business

Transcript of Realising Business Value