Strategic Planning & Exit Strategies

Eventually every owner leaves his or her business. Just as when one sells a home the value of the home can be higher if the owner took action to maximize the homes value. It is a similar in a business. Summa Financial Group will guide the owner in the process of developing a plan to exit the business with a maximum benefit to the owner. The time to begin implementing an exit strategy is the day the business begins operation.

The professional services provided for developing a maximum owner value include:

Establish Objectives

• Establish with the business owner the plan for leaving the business.
• For example, strategies are different for each of the following situations:
  • Pass the business on to the daughter or son
  • Sell the business to an Employee Stock Option Plan (ESOP)
  • Sell the business to a strategic or synergistic buyer

Determining Current Value of a Business

• This requires an appraisal to determine the fair market value

Establishing a Time Frame

• Determine when the owner would like to sell the business

Establishing an Action Plan

• Working with the owner determine the events that are required to increase the company ’s value.
• Representative steps are:
  • Entering into lease agreements that are desirable for target buyers, e.g. are leases assumable; is the lease term too long?
  • Cleaning up the balance sheet
  • Developing strong management to operate the business when the current owner leaves
  • Dropping low margin customers
  • Cleaning and freshening facilities and grounds