Legacy Programfor

You and Your Company

What Do You Want Your Legacy to Be?

Are You Set For Life?

• Do you have an estate plan?• Do you have a succession, exit or

transition plan defining your eventual exit from the business?

• Do you have a comprehensive tax strategy that integrates your long-term goals & objectives with your eventual exit?

• Have you had a formal business valuation completed for your business?

• Do you know how much you need (not want) to net, if and when you exit your business?

• Do you have a contingency plan in case you become incapacitated?

• Are your partners and/or family in agreement with your long-term plans and objectives for the business?

• Do you have a strong management team in place?

Are You Set For Life?

• Does the business have customer concentration?

• Do you have a strategic business plan?• Are your products/services threatened by

obsolescence or global competition?• Is equipment up-to-date and in good

working condition?• Are your offices or buildings adequate to

serve the needs of the business?

Are You Set For Life?

• Is the industry/market in which you compete growing?

• How competitive is your marketplace?• Do you have significant market share or a

protected niche in the market?• Are your profit margins in line with industry

norms?• Does the company have a consistent

record of sales & profit growth?

Are You Set For Life?

• Is the company’s business seasonal?• Are your financial statements audited?• Is your company organized as an “S”

corporation?• Has your company had any material

lawsuits?• Does the company have sufficient

business insurance to cover potential liabilities?

• Has your company had an environmental audit?

Are You Set For Life?

What Do You Want Your Legacy to Be?

Your Legacy is the sum of all of your: Personal Goals Business Goals Financial Goals Family Goals Community Goals Charitable Goals

Common Reasons for Not Developing a Plan

You spend your time running your business

You DO NOT know where or how to begin

You may have difficulty discussing financial matters and personal goals

The process seems too daunting

Common Obstacles to Developing a Legacy Plan

You’re busy balancing three different value systems.

Generational differences between stakeholders may create barriers.

You may be afraid of what life may be like without the business.

But Unfortunately… You’re Human! You will exit your business

sooner or later. You face issues you can’t control.

Health DeteriorationChanging MotivationsDivorceDeathBusiness Disruption

Components of a Successful Plan

1. Goals & Objectives2. Personal Financial Plan3. Succession /

Contingency Plan4. Business Valuation

5. Strategic Analysis / Value Enhancement

6. Exit Options7. Tax Plan / Net Proceeds

Analysis8. Detail Action Plans

1. Statement of Goals

Foundation for the exit plan

Include all stakeholders

Identify and document business, financial and personal goals.

Goals should be specific, realistic, optimistic, honest and measurable.

2. Personal Financial Plan

• How much do I need to accomplish my personal goals?

• How should I invest the proceeds of the sale to meet my financial goals?

3. Succession / Contingency Plan

Written Instructions Communicate Stay Bonus Life Insurance

Disability Insurance Shareholder Buy-Sell

Agreement Emergency Action Plan

4. Business Valuation

The business valuation should be prepared By a valuation professional Should be evaluated using the four widely

accepted valuation techniques Should consider the valuation’s purpose and Be specific to your business

5. Strategic Analysis / Value

Enhancement Tactics

How will a buyer see my business? How can I maximize the value of my

business? There are over 20 strategies and 60 value

enhancement tactics available to select from.

6. Analysis of Exit Options

• Transfer to Family Members

• Sell to Shareholders• Sell to Management• Sell to Employee Stock

Ownership Plan

• Sell to Third Party• Strategic Buyer –

Stay or Leave • Private Equity –

Stay or Leave• Refinance or Recapitalize• Go Public• Liquidate the Business

Business Transfer Spectrum

TRANSFER MOTIVES

Employees CharitableTrusts

Family Co-owners Outside(Retire)

Outside(Continue)

Co-owners

TRANSFER CHANNELS

7. Tax Plan

How do I minimize • Capital Gains Taxes?• Ordinary Income Taxes?• Estate Taxes?

8. Detailed Action Plan

What needs to be done?

When does it need to be done?

Who will do it?

Who will ensure it gets done?

Profile of a Great Company

• The Right Leadership Team• The Right Organic Plan• The Right Financial Characteristics• Exit Strategy Alternatives

How Do You Know When to Sell Your Company

–Strength of the economy– Is the market hot?

– Is your industry in favor?– Capital gains tax treatment

– Availability of debt / financing

How Do You Know When to Sell Your Company

– Is your company ready to sell?– Are you ready to sell?

Question and Answer Period

Thank You