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
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
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
THE 86 GROUP NETWORK
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
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
-
ProblemThe Company was losing money driving a low valuation
-
SolutionCreated 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
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
