Blog

5 Reasons Why You Need A Valuation

Valuation is important at every stage of your business lifecycle. Owners assume it’s implicit in their revenue goals, growth goals, hiring and expanding. Instead, a formal tangible valuation is essential all along the way to keep your company on course. These five reasons are tied to the lifecycle of every business.

    1. Launch
      Ideally, if you follow Stephen Covey’s advice to ‘begin with the end in mind,’ you will perform your first valuation before you open your doors. This will give you a baseline for everything else you do. It also starts the habit of focusing on value, not just revenues.

    2. Growth
      As you grow your business, periodic valuations are a measure of how the market would value every area of your business. A valuation report will help direct you to focus on certain value drivers to achieve your objectives.

    3. Mature
      Consistent periodic valuations will help you measure your position in the market, your competition, as well as timing the best opportunity for your sale or exit. Basing your exit timing on objective third party reporting will guide you to make strategic decisions that give you more leverage in negotiations before you get to a transaction.

    4. Decline
      If your business is in decline for any reason and you have been conducting periodic valuations along the way, you will see the symptoms of that decline earlier, be in a position to respond and correct the situation to mitigate risk and damage.

    5. Transfer/Transaction
      The valuation process owners are familiar with is the one initiated by the intended buyer or acquirer. This valuation on its own, late in the game, is a wildcard – you don’t know what their business appraiser will discover, focus on or be concerned by. Any questions or concerns they find will (intentionally) discount the offer price or possibly derail the whole thing. But if you have a history of three or more periodic valuations:


    1. You won’t be surprised by anything they find, anything they ask for
    2. You will be better prepared for the process
    3. You will have uncovered and resolved every concern they could raise, beforehand.
    4. You will have your documents complete, up to date, accessible, in a format they seek
    5. You will fare much better through the process because you are prepared to be so forthcoming
    6. You will be in a position to support and defend the value you expect to command in the marketplace.

 

There are many different ways a business appraiser can value your business. In addition, a wide range of objectives also affect how the calculations are done. Be sure your periodic valuations are consistent in formula and objectives.

I don’t perform valuations, but I do help you build, track and measure the value drivers that will enhance your market valuation. Call 508.820.3322 or email us to discuss your unique situation.

 

8 Figure Valuation Roadmap – Registration is Open

If You Desire to Ever Sell, Scale or
Pass on Your Business for $10M+
You Can’t Afford to Wait.
You Need This Roadmap Now

November 6, 2014

large-registernow

 

This Way Out Group is offering a full-day interactive and practical session on building value in your business and a timeline of available exit options and strategies.

 

8 Figure Valuation Roadmap with Kerri Salls banner

 

This 8 Figure Valuation Roadmap with Kerri Salls offers you a confidential personal assessment of your business’ value drivers relative to other companies. In addition, this one-day transformation immersion will give you insight, perspective, tools and a roadmap to:

  • accelerate growth and
  • maximize the value of your business now.

 

Tickets

A limited number of Scholarship Discount Tickets are available until September 21.
See the Registration page for details.

VIP Master Pass Tickets offer extensive services and assets before, during and after the event.
Check out the Registration page now for details.

 

large-registernow

Program

Introduction

  • Starting, growing, adding value and exit planning are an integrated continuum – all are essential to maximize value and monetize your business.


PLAN

  • You can better position your business for amazing growth and increasing value if you start with a plan


STAGE

  • An action plan that adds value to your business immediately and prepares you and your business to attract the highest valuation opportunities


DRIVE

  • The roadmap to drive the process to a transaction to guarantee your transition to reinvention


ACHIEVE

  • Identifying, communicating and testing your reinvention plans. Ensuring that your next venture, adventure, avocation or opportunity is even more engaging, compelling and fun than the business you let go

 

Along the way, we’ll address:

  • Hard skills to maximize value and wealth
  • Soft skills and expertise to monetize every asset
  • Your Next Steps

 

Intended Audience

The 8 Figure Valuation Roadmap is a fit if you are the Owner/CEO/President/Founder of businesses with current revenues up to $30M.

Whether you plan to monetize your business in the next 3-5 years or not for another 3 decades, this program is essential, now. Even if you only have an inkling of what that future looks like, you need this immersion training now.

This program is not suitable for experts, advisors or other company officers.

Seating is limited. Register early for Thursday, November 6, 2014.

large-registernow

Why This Seminar?

To guarantee you can cash out of your business
to cash in on that life beyond your business,
because of the value you can prove is in your business.

Traditional Exit Strategies Are Broken

Excellent article on Entrepreneur.com by Simon Cohen, founder of Global Tolerance.  He gave his business away.

He elaborates on his three reasons for his OLE (Open Leadership Exercise):

1. Traditional Exit Strategies are Broken
 For any entrepreneur, putting your life’s work in the hands of a strategy that succeeds only one in four times is flawed. “

2. Values have Value
“It’s amazing to me how many companies express certain values, but when it comes to exit, those values are left at the door. In a world of discerning customers, this is a disaster for brand and customer loyalty — and the long-term value of the company. “

3. Happiness
“…too many people confuse money as the ends rather than the means. For the most part, we want to be happy. To make a difference. To live a life of meaning.”

The whole (brief) article is worth reading.

The Emerging Power Practice: Exit Planning, Value Enhancement and M&A Services

Topic Overview:

Traditionally viewed as three distinct practices Exit Planning, Value Creation Consulting and Investment Banking, the emerging Power Practice of tomorrow embraces the paradigm shift of a truly integrated approach to helping sellers extract maximum value from the sale of their company as well as allows Intermediaries a deeper more longitudinal relationship and greater fee participation and deal flow over time.

I was seated on the panel discussion on this topic at the AMAA conference in Chicago on July 24, 2014 addressing an audience M&A advisors.

The Moderator was Craig Dickens – CEO, Merit Harbor Group

The Panelists were:

Peter Christman – CEO, The Christman Group
KevinHanson – CEO, The Ashton Group
Kerri Salls – Managing Director, This Way Out Group LLC
Kathleen Richardson-Mauro – Co-founder, Richardson-Mauro & Johnson

Agenda

  1. Plan – The need for a plan
    Preparing the seller
    Get over resistance – why entrepreneurs don’t plan –
    Tangible results of a plan on deal completion
  1. Un-siloing silos – the need for an integrated deal team.
    Where collaboration leads to better results
    Setting ego aside
    Who is the quarterback.
  1. Tools of collaboration
    Data share – exit plan yield % done deals etc.
    Integrated deal team = better results etc.
  1. The Emerging Power Practice
    Identifying true targets. Create your own deal flow
    Tatum Thesis example
    Giving the seller a plan or empowering the seller.
    Marshaling the difference between advisory and sell-side activities
    The hand-off from plan to value creation to execution and seller readiness
    Cash Flow implications to a Power Practice.

The consensus on the panel was that owners need a team to get to the deal and to complete the deal. And they need exit planning and value creation expert guidance much earlier than they need transaction guidance.  With a power practice team on board, the client benefits from advisors being fully up to speed and engaged on their issues, their goals, their criteria long before the intense transaction cycle begins. Both the client and the advisors benefit from an integrated team collaborating for better client results. That’s the emerging power practice.

 

Your Magic Operational Dashboard

Your Magic “Operational Dashboard”

Your magic “operational dashboard” is simply a listing of your business’ key metrics (your key performance metrics (KPI)). They are effective for many reasons.

GoDaddy CEO, Bob Parsons, summed it up when he said,

Measure everything of significance. Anything that is measured and watched, improves.”

It’s simpler than you think. List your company’s key metrics; the numbers, activity, results that are important to you. These become your personal ‘magic’ dashboard.

Simply by measuring something, it can improve. Intuitively, this makes sense. Start with your own operational dashboard to track performance and exactly how your business is performing overall.

Tracking and measuring will:

  • improve productivity
  • demonstrate value
  • provide the data to spot and fix problems faster

ACTION: Prove it to yourself. Pick 3 things significant to your bottomline. Measure, watch and track them for 30 days. See what improves.

Top 10 Questions To Start Thinking About Value Enhancement

Wherever you are in your company lifecycle, start thinking now about the value of your company in the marketplace.

If you are a fast-track startup, showcasing your value and tracking your increasing value will make you a very attractive investment opportunity when you seek growth capital. If you are an established firm, clearly understanding the value you bring to the market will help position you as the most appealing acquisition/buy candidate in your space.

Value enhancement is not just a cleanup effort before the buyer’s appraiser comes in in the transaction process. Value enhancement is an overarching strategy to build a stronger, more robust company.

Here are 10 key questions to think through to maximize the value of your business.

  1. Who are your top 10 most profitable customers? Look at your 80/20 split.
  2. Who (what other customer) can move into your top 10 – if a client moves on/stops ordering?
  3. What new product or service could you add, break out as a paid add-on to increase revenue?
  4. What possibilities have you considered to accelerate your current business?
  5. Which (if any) of your sales are difficult to collect on? Identify those sales with high internal costs to get paid. Lower-cost orders/sales are less of a burden on the books/balance sheet.
  6. When do you identify customer complaints? When do you fix them?
  7. When was the last time you reviewed your pricing structure?
  8. Do you know who your top 20% of customers are? Why are they your top 20? Do you know your bottom 4%? Do you know what they cost you in time, staff, materials costs and goodwill, etc.?
  9. How current is your technology? Where should you update or upgrade technology to boost the bottom line?
  10. In your business model, what % of your sales is tied up as deferred income?

 

Your answers identify the numbers, activity and results that can provide value enhancement to your business now.

If you need help creating systems to identify and track these value metrics, call or email us.

 

Will Your Business Be More Valuable this Time Next Year?

For many, January is a time of rebirth and resolutions. It’s a month to reflect on last year’s achievements and to set goals for the year ahead. July 1, six months later, is a good time to revisit goals, resolutions, and progress made towards this year’s achievements.

 

Some people set personal goals like losing weight or quitting a nasty habit, and most company owners set business goals that focus on hitting certain revenue or profit milestones. But if your goal is to own a more valuable business this year, you may want to commit to at least one of the following business resolutions:

 

  • Take a two-week (or even three-week) vacation without checking in with the office (i.e., no cell phone). When you return, you’ll see how well your company performed and where you need to make a key hire or create a new system.

 

  • Write down at least one process per month. You know you need to document your systems, but you may be overwhelmed by the task of taking what’s inside your head and putting it down in writing for others to follow. Resolve to document one system a month and by the end of the year you’ll own a more sellable company.

 

  • Offload at least one customer relationship. If you’re like most business owners, you’re still your company’s best salesperson, but this can be a liability in the eyes of an acquirer, which is why you should wean your customers off relying on you personally as their point person. By the time you sell, none of your key customers should think of you as their relationship manager.

 

  • Cultivate a new relationship with a new supplier. Having a “go to” group of suppliers is great, but an over-reliance on one or two suppliers can create a liability for your business. By spreading some of your business to other suppliers, you keep your best suppliers hungry and you can make a case to an acquirer that you have other sources of supply for your critical inputs.

 

  • Create a recurring revenue stream. Valuable companies can look into the future and see where their revenue is going to come from. Recurring revenue models can vary from charging customers a small amount for a special level of service to offering a warranty or service contract.

 

  • Find your lease (and any other key contracts). When it comes time to sell your company, a buyer will want to see your lease and understand your obligations to your landlord. Having your lease handy can save time and avoid any nasty surprises at the eleventh hour in the process of selling your company.

 

  • Check your contracts and make sure they would survive a change of ownership of your company. If not, talk to your lawyer about adding a line to your agreements that states the obligations of the contract “surviving” in the event of a change of ownership of your company.

 

  • Start tracking your Net Promoter Score (NPS). The NPS methodology is the best predictor that your customers will re-purchase from you and/or refer you, which are two key indicators of a healthy and successful company. It’s also why many strategic acquirers and private equity companies use NPS as a way to measure the health of their acquisition targets during due diligence.

 

  • Get your Sellability Score. Every goal starts with a benchmark of where you’re at today, and by understanding your company’s Sellability Score, you can pinpoint how you’re doing now and which areas of your business are dragging down your company’s value.

 

A lot of company owners set New Year’s resolutions around their revenue or profits for the year ahead, but those goals are blunt instruments. Instead of just building a bigger company, also consider making this the year you build a more valuable one.  Pick two resolutions from the list above to execute before the end of the year. Email me what you will do. I’ll keep you accountable to make yours a more valuable business.

Announcing the Release of Selling Your Business for Maximum Profits TODAY

Announcement

This Way Out Group LLC, the elite provider of early exit strategy services in the lower middle market, announces that Managing Director Kerri Salls, the pioneering exit strategy leader behind the groundbreaking 4 Step Exit Strategy Framework™ has released her complete system,

Selling Your Business for Maximum Profit.

This program will ensure that owners of private and family owned businesses can avoid being part of the 90% failure statistic, when implemented years before they intend to harvest the wealth in their business.

Selling your business pkg

Selling Your Business for Maximum Profit is for all business owners who think they want to sell their business in the next 2-7 years. If they are counting on making the most money possible when they sell their business, they can’t afford to wait, postpone, deny or ignore these essential steps in the processto avoid 5 deadly mistakes that most business owners make when planning their exit strategy.

Read more – http://www.thiswayoutgroup.com/?p=2771

Order now – www.sellingMP.com

Order using the promocode: May 2014 to save $1,000.
This offer expires May 31, 2014.

It’s never too early or too late to plan your exit

PS – Put more leverage on your side of the table when it’s time to cash out. Here’s the blueprint to do that. Get your copy now.

PPS – You can order directly from the page above or email us at emails@thiswayoutgroup.com if you’re ready to prepare yourself, your business, your family and your finances for your reinvention.

 

Selling Your Business for Maximum Profit

Press Alert:
Exit Strategy Pioneer Offers Alternative to Help the 90% of All Business Owners who Close Down With Nothing.

Serial entrepreneur and exit strategist Kerri Salls releases Selling Your Business for Maximum Profit to prepare the 8M baby boomer business owners who want to cash out by 2018.

Boston, Massachusetts (PRWEB) 21, May 2014

This Way Out Group LLC, the elite provider of early exit strategy services in the lower middle market, announces that Managing Director Kerri Salls, the pioneering exit strategy leader behind the groundbreaking 4 Step Exit Strategy Framework™ has released her complete system, Selling Your Business for Maximum Profit. This program will ensure that owners of private and family owned businesses can avoid being part of that 90% failure statistic, when implemented years before they intend to harvest the wealth in their business.

Selling Your Business for Maximum Profit is for all business owners who think they want to sell their business in the next 2-7 years. If they are counting on making the most money possible when they sell their business, they can’t afford to wait, postpone, deny or ignore these essential steps in the process to avoid 5 deadly mistakes that most business owners make when planning their exit strategy.

In this comprehensive program, Kerri shows owners how to plan and transform their income producing business into a wealth-producing asset that can be monetized to fund their reinvention, whether they move on to a new venture, adventure, avocation or a favorite hobby. Kerri’s early exit planning approach is revolutionizing an industry where historically, selling business owners are ill equipped to leverage any transaction to achieve their dreams in business and beyond, and only a dismal 10% ever cash out.

As Kerri teaches in Selling Your Business for Maximum Profit, it takes 2-5 years to accelerate growth and maximize value to make a business buyer ready and buyer attractive. In Selling Your Business for Maximum Profit, Kerri takes owners by the hand and leads them through a step-by-step system that Kerri says any business owner can learn and apply.

But until now, no one ever told owners that early exit planning was essential or that it takes just as much time, effort and focus to be able to cash out as it did to start and grow their business.

Selling Your Business for Maximum Profit includes the A-Z reference manual, HARVEST Your Wealth, and the companion 5 hours of audio training alongside the ultimate resource, their own personalized plan creation workbook, to apply these modules to their own business in bite-size pieces.

David Corbin says: “Implement the tools and strategies from HARVEST Your Wealth and you will live and sleep with peace. Why? Because you will control the destiny of your business AND your life. The wisdom and knowledge that Kerri Salls shares in this book is worth its weight in gold, literally. It is a must read for any serious entrepreneur.” And Joel Bauer says: “Without Kerri’s book, HARVEST Your Wealth, you are planning to fail in life.”

Selling Your Business for Maximum Profits reveals Kerri’s simple, step-by-step proven system, enabling any business owner to make their business both buyer ready and buyer attractive so they can cash out of their business to cash in on their reinvention dream. “The key to my effectiveness,” she says, “is based on a coordinated collaborative approach to build value and plan an owner’s exit in parallel. I give readers the decision and planning tools they need, to maximize their profits from selling, scaling or passing on their business to successors.”

Kerri has simplified what is often a daunting and intimidating process down to simple methods, tools, templates and checklists that prepare owners for the biggest payday of their life. It covers:

  • How to transform an income generating business into a wealth-producing machine they can sell or scale on their terms and on their timeline.
  • How to accelerate growth, maximize value and make their business both buyer ready and buyer attractive
  • How to optimize the growth whether they want to sell in three years or thirty years.
  • And so much more

Details and purchase information for Selling Your Business for Maximum Profits by Kerri Salls are available at http://www.sellingMP.com.

At This Way Out Group LLC, http://www.thiswayoutgroup.com, Managing Director, Kerri Salls is leading a revolution in the exit planning field. As a prominent exit strategist and mentor who prepares lower middle market owners and entrepreneurs to achieve their optimum exit outcome, she has created a new early exit planning paradigm focused on the selling business owner, starting well before transaction advisors get involved, in order to increase the seller’s leverage at the negotiating table.

Since 2012, Kerri Salls has been the host of the groundbreaking podcast radio show Exit This Way on URBusiness Network and has produced over 160 shows discussing the idea that “it’s never too early or too late to plan your exit.”
TO ARRANGE INTERVIEWS OR TV/RADIO APPEARANCES CONTACT:
Kerri Salls
This Way Out Group LLC
http://www.thiswayoutgroup.com

# # #

Do You Want To Make The Most Money Possible When You Sell Your Business?

“Do You Want To Make The Most Money Possible
When You Sell Your Business?”

Do You?

If you’re like most business owners, your answer to the question above is a resounding “YES!”  If so, then pay close attention to this message so you don’t make

The 5 Deadly Mistakes That MOST Business Owners Make When Planning Their Exit Strategy!

These easily avoidable oversights can (and WILL) wipe out as much as half of your potential net worth! But, early adjustments will help you maximize your profit when you exit your business.

That’s why I developed my 4 Step Exit Strategy Framework System™ which I’ve now turned into this home-study program Selling Your Business for Maximum Profits.

Tomorrow, Tuesday, May 27, is the product launch for Selling Your Business for Maximum Profits. Watch for an early morning email with the website link AND your promocode to take $1,000 off the regular price.

These easily avoidable oversights can (and WILL) wipe out as much as half of your potential net worth! But, early adjustments will help you maximize your profit when you exit your business.

It’s never too early or too late to plan your exit

PS This discount promocode will expire on May 31. You must act now to secure your copy of Selling Your Business for Maximum Profits at this special price.

 

© 2009- 2016 This Way Out Group LLC top