THINKING OF SELLING A BUSINESS? SECURE YOUR PLACE AT OUR EXIT STRATEGy PLANNING SESSION

Reserve your place

STRATEGIC
PLANNING
SESSION

ROUND TABLE DISCUSSION

CURRENT SOCIAL ENVIRONMENT

  • What are you experiencing in the market?
  • What have you done to adjust?
  • How will you navigate the current environment?

ROUND TABLE DISCUSSION

IDEAS FOR NAVIGATING UNCERTAINTY

CUT COSTS

RE-FINANCE

PIVOT YOUR
BUSINESS
MODEL

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EMPOWER
YOUR EMPLOYEES

MANAGE REVENUE
STREAMS

MAXIMIZE EXIT
VALUE

WHO IS THE 86 GROUP

BUSINESS BROKERAGE

&

INVESTMENT BANKING FIRM

Serial Entrepreneurs

50+ years of combinedindustry experience

Boutique Firm

Hands-on-approach assisting through every step of the transaction process

Industry Agnostic

Working across all industries & markets

DFW Focused

Boots on the ground market experts with geographic reach

90% deal closure success rate with proper exit planning

OUR COMPANYAT A GLANCE

WHAT WE DO

BUSINESS BROKERAGE

Sell-side Representation
Buy-side Representation

FINANCIAL SERVICES

Debt Financing
Capital Raising

COMMERCIAL REAL ESTATE

Business Acquisition Real Estate
Stand-alone Real Estate

THE 86 GROUP ADVANTAGE

THE 5 STAGES OF SELLING A BUSINESS

Approximately 1-Year Timeline to Sell a Business

STAGE ONE EXIT STRATEGY

2 – 4 Weeks

  • Define Seller Objectives
  • Develop Pre-market Analysis
    • SWOT Analysis
    • Financial Review
    • Site Visit
    • Digital Marketing Review
  • Perform Initial Valuation
  • Create Strategic Improvement Plan
  • Exit Strategy

  • Market Prep

  • In Market

  • Negotiation

  • Closing

STAGE TWO MARKET PREP

2 – 4 Months

  • Implement Strategic Improvement Plan
  • Finalize Business Valuation
  • Create Business Profile / Memorandum
  • Establish & Approve Marketing Plan
  • Exit Strategy

  • Market Prep

  • In Market

  • Negotiation

  • Closing

STAGE THREE IN MARKET

3 – 6 Months

  • List on Commercial Marketing Sites
  • Launch Digital Platforms
  • Market to Buyer List
  • Manage Buyer Deal-flow Process
  • Collect Buyer Offer(s)
  • Exit Strategy

  • Market Prep

  • In Market

  • Negotiation

  • Closing

STAGE FOUR NEGOTIATION

2 – 3 Months

  • Select Prospective Buyer(s)
  • Qualify Prospective Buyer(s)
  • Negotiate Non-binding Agreement
  • Perform Due Diligence
  • Commit Escrow Funds
  • Exit Strategy

  • Market Prep

  • In Market

  • Negotiation

  • Closing

STAGE FIVE CLOSING

1 – 2 Months

  • Retain Counsel
  • Draft Definitive Documents
  • Set Closing
  • Get Paid!
  • Exit Strategy

  • Market Prep

  • In Market

  • Negotiation

  • Closing

COFFEE
BREAK

BUYER DEALFLOW PROCESS

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THE 86 GROUP NETWORK

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IT’S A GREAT TIME TO SELL

  • Prime rates are at an all-time low
  • Lack of inventory in the market
  • Baby boomers are selling over the next 5 years
  • Low Capital Gains Tax

THE THE COST OF GETTING IT WRONG

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Clients who don’t properly
plan a business exit

Clients who do properly plan
a business exit

CLIENT 1 – 2 – 3 – 4

Auto Parts Manufacturing Company

  • Problem

    The Company was losing money driving a low valuation

  • Solution

    Created a forward roadmap to enhance the valuation

  • Result

    - Increased the list price by 30%
    - Increased the exit value by $3MM

2019 Adjustments Pro-forma
Total Sales 6,622,088 + 73,160 6,695,248
COGS 4,849,613 - 865,941 3,983,672
Gross Profit 1,772,475 + 939,101 2,711,576
Overhead 2,592,731 - 1,322,909 1,269,822
Net Profit (820,256) + 2,262,010 1,441,754
Multiple 2x - 2x
Earnings Value - + 2,883,508 2,883,508
Asset Value 9,975,850 - 9,975,850
Valuation 9,975,850 + 2,883,508 12,859,358
List Price $ 10MM $ 13MM
Adjustments
Consolidated 4 facilities under one roof
- Lowered costs
- Increased efficiencies

CLIENT 1 - 2 – 3 – 4

Electrical Contractor Business

  • Problem

    Net Profit didn’t accurately show the true cash flow of the business

  • Solution

    Analyzed the financials and found where value could be added-back

  • Result

    - Increased the list price by 107%
    - Increased the exit value by $785K

Books Recast Adjusted
Total Sales 2,126,370 - 2,126,370
COGS 1,519,140 - 54,765 1,467,335
Gross Profit 607,230 552,465
Advertising 61,500 - 45,300 16,200
Insurance 19,517 - 19,517
Office Expense 32,002 - 32,002
Personal Auto 28,755 - 4,066 24,689
Personal Meals 46432 - 4,643 -
Personal Phone 4,273 - 4,273 -
Rent 33,987 - 33,987
Taxes 3,059 - 3,059
Utilities 5,960 - 5,960
Wages 176,178 - 126,421 49,757
Net Profit 237,356 + 240,926 477,198
Valuation (3x) 712,068 + 719,526 1,431,594
List Price $ 715K $ 1.5MM

CLIENT 1 - 2 - 3 – 4

Managing Services & IT Company

  • Problem

    The company relied on 95% of revenue to come from 1 customer

  • Solution

    Created a plan with the Company to diversify their customer base

  • Result

    - Increased the list price by 50%
    - Increased the exit value by $650K

Customer Base
Original Adjustments Updated
Cash Flow 609,000 - 609,000
Multiple 2x + 1x 3x
Valuation 1,218,000 + 609,000 1,827,000
List Price $ 1.2MM $ 1.85MM
Updated Multiple
Divided the customer base by project type to enable
SBA financing

CLIENT 1 - 2 - 3 – 4

Wind Energy Part Supplier Company

  • Problem

    The Owner had unrealistic price expectations

  • Solution

    Structured the deal to give the Owner their desired value

  • Result

    - Increased the list price by 53%
    - Increased the exit value by $927K

Original Offer Negotiated WIP
List Price 1,750,000 1,750,000
Cash 200,000 200,000
Bank Financing 1,175,000 1,175,000
Seller Financing 375,000 375,000
Earnout for WIP - 927,483
Cash at Close 1,750,000 2,677,483
Negotiated WIP
Structured the deal to allow the Seller to retain earnings
from WIP (work-in-progress)

CLIENT 1 – 2 – 3 – 4 SUCCESS

  • Transactions performed
  • Average increased list price
  • Total increased exit value

PROBABILITY OF A SUCCESSFUL

  • 20.0%

    Selling without
    a Broker

  • 37.0%

    Selling with a
    Broker

  • 50.0%

    Selling with an
    identified buyer

  • Failed Exit Planning
  • 90.0%

    Selling with The 86
    Group

  • ProperExit Planning

INVESTING FOR A
SUCCESSFUL EXIT

WHAT YOU GET

  • Full 5-stage Deal Package
  • 2-year Engagement Agreement
  • Fee Credited at Close
  • Payment Plans Available
  • Successful Business Exit