August 2017 – New Century Dynamics Executive Search

August 20, 2017

Exit Strategy

by David Shavzin

Business Exit Structure is the fourth high-level step I discuss when speaking on succession/exit planning.

My last three blogs covered the first three steps: Step 1: Exit Planning / Succession Planning is a TEAM SPORT; Step 2: Knowing Your Business Value; Step 3: Building Transferable Value. The fourth step, Business Exit Structure, comes in many flavors.

How Can I Leave Thee – Let Me Count the Ways

It is not simply a matter of handing over the business and getting a check for the full amount on your way to the islands for the rest of your life. Despite what you hear, it rarely happens that way. It may be a payout over time, the amount may be tied to future revenue targets, it may require your continued involvement for a period of time.

You may simply not be ready to accept offers that are put in front of you, requiring you to stay in the business longer than you would like.

A few options to consider for your business exit structure:

• Sell to a 3rd Party: An investor or someone looking for a business to run and grow.

• Sell to Family: Could be ideal, could be complex and personally challenging!

• Sell to Employees: Current staff knows the business, employees keep their jobs.

• New Employee/Acquirer: Bring someone in, teach the business, agree to sell at a certain date.

• Retain Ownership: Sell majority ownership, but keep an income stream over time.

• Shut the Doors: Liquidate, perhaps the only choice due to a crisis or lack of planning.

• Strategic Sale: Find a competitor who may pay more because of various cost savings.

• The Two-Step: Merge with a competitor as a first step and have a plan for a buyout over time.

• Split in Two: Don’t want to completely retire? Is there a product or service you enjoy and would want to keep?

• Die – No Really!: Want to work forever? Ok, but you still need to plan.

The Bottom Line on Business Exit Structure

There are dozens of formulas for business exit structure. Start planning early, build your advisory team and outline at least a target exit scenario so you have something to work toward. Discuss the pros and cons of each possible scenario. You can always adjust along the way, but having an initial plan will help bring you and your team together toward common goals.

A successful transition takes time. The earlier you start, the more flexibility and negotiating power you will have for your business exit structure.

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More Reading:

Step 1: Exit Planning / Succession Planning is a TEAM SPORT

Step 2: Knowing Your Business Value

Step 3: Building Transferable Value

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David Shavzin, CMC

Shavzin and Associates, Inc.

Valuation, Succession / Exit Planning, Building Value for Sale

Atlanta, Georgia

770-329-5224

Our BLOG

dshavzin@shavzinassociates.com

www.ShavzinAssociates.com

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Jim Weber, President

New Century Dynamics Executive Search

Author of: Fighting Alligators: Job Search Strategy For The New Normal

JimWeber@NewCenturyDynamics.com

Assignments

1. COO- Atlanta-based Casual Dining Restaurant Company – New

2. Controller – Atlanta-based Consumer Products – Digital Company – Completed

3. Director of Biz Dev, Atlanta-based B2B Professional Services Company: Completed

4. Payroll-Benefits Manager, Atlanta-based Retail Company: Complete

5. Senior Accounting Manager – Atlanta-based Manufacturer. Complete

6. Controller – Atlanta-based Restaurant Company: New

August 18, 2017

Another Stellar Recommendation For Fighting Alligators: Job Search Strategy For The New Normal

"Jim, I bought your book and read it cover to cover! There are some fantastic jewels laid out in your book. Great Job! Thank You!" Tom Sacco, President and CEO, Homestyle Dining LLC

Jim Weber has recently completed a new book: "Fighting Alligators: Job Search Strategy For The New Normal" is now available for purchase on Amazon.com

August 15, 2017

New Century Dynamics Executive Search Completes Controller Search

New Century Dynamics Executive Search, has successfully completed a Controller Search assignment for a CPG – Digital client based in the Atlanta Metro Area. This client is a privately held company experiencing rapid growth. We validated a number of highly qualified candidates during this process, so if you have a similar need we can move rapidly on your behalf.

There is another career strategy you should consider:

ITB Partners is looking for consultants to join our team!

If you are interested in a career as a freelance consultant, we want to talk with you.

We offer our consultants a branded umbrella to help you build and sustain your business.

Marketing and Public Relations Support
Team of Consultants to Collaborate With
Website with Dedicated Page for the Freelancer
Email Account
Business Development Support
Referral Network
Mentoring
Email Marketing support

We are looking for professionals from all industry segments and functional disciplines who have 25 years of corporate experience, having achieved Senior Level Management status. Do you have experience building and leading significant business units? If so, we should talk!

Thank you once more for your interest in New Century Dynamics Executive Search.

Sincerely,

Jim Weber

James E. Weber, President

New Century Dynamics Executive Search

www.newcenturydynamics.com

JimWeber@newcenturydynamics.com

August 10, 2017

Exit / Succession Planning: Transferable Value and Value Drivers

Guest Blog Post by David Shavzin; Partner, ITB Partners

A laser focus on key business TRANSFERABLE Value Drivers will maximize your exit. When I speak on exit and succession planning, I talk about four high-level steps. My last two blogs covered the first two steps: Step 1: Exit Planning / Succession Planning is a TEAM SPORT and Step 2: Knowing Your Business Value and Step 4: Business Exit Options.

Step 3: Understanding TRANSFERABLE Value and Value Drivers

First, let’s discuss Transferable Value

I usually put it this way: “What would happen if you left your business for three months, headed down to an island with absolutely no way to communicate?”

If you get back and the business is humming along well, even thriving, you may well be on your way to significant transferable value.

If sales didn’t happen, if bills were not paid, if your products or services were not delivered, if 2 key employees quit and if the leaking roof completely fell in – because you were not there – you probably don’t have much transferable value.

The company’s dependence on you for success limits Transferable Value to a buyer. A buyer does not want to see a significant amount of knowledge walk out the door upon purchasing your business. If that’s the case, they will pay you a lot less than you want for it.

Perhaps the extremes of 1) or 2) above don’t apply to you, but the reality is that most businesses have a long way to go to optimize transferable value.

The big goal: make yourself irrelevant to the business. “But, but…” I hear you start to protest. Get over it! If your goal is to have the money that you need/want for yourself and your family, you need to raise your business like a child, preparing it to live life on its own…without you.

Now, the Top Ten Drivers of Transferable Value

These are not necessarily in priority order and should all be addressed as you work on growth, succession, and exit. Develop a plan that truly addresses these ten items, and start working the plan now:

• Your revenue will improve immediately.

• You will feel better and enjoy the business.

• Your value will start to grow quickly.

1. Sustainable, Recurring Revenue.

2. Written Business Processes: update them regularly, train to them regularly. Repeatable, consistent operating systems drive the customer experience and sustainable cash flow.

3. A Technology infrastructure that supports your plan and value drivers, while staying current!

4. Management Team and senior staff who are trained and motivated. Make sure that your employees are Knowledgeable and Engaged.

5. Sustainable, Competitive Advantage: Is there something that is truly different about you? If not, find it! Don’t be a commodity and don’t tell me “we have great customer service”!

6. Scalability: are you ready to take on a new customer that adds 50% to your revenue? 100%?

7. Diversified Customer Base: Is one customer more than 20% of your revenue? And how often do customers leave you?

8. Customer Experience: Do you truly know how your customers experience your products and services?

9. Financial Performance: Sustainable, Growing Cash Flow and Financial Controls.

10. Written Growth Plan

The Bottom Line on Transferable Value

The business needs to thrive – without you! Develop and work a plan that addresses the top ten value drivers. Start today, measure your progress and adjust your tactics if you get off track on your exit planning.

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More Reading:

Step 1: Exit Planning / Succession Planning is a TEAM SPORT

Step 2: Knowing Your Business Value

Step 4: Business Exit Options.

Transferable Business Value and What Drives It:

http://www.forbes.com/sites/johnbrown/2016/06/30/transferable-business-value-and-what-drives-it/#22c215fe7241

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David Shavzin, CMC