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Business Exit Planning Presentation Template

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Planning - presentation template

Transcript: Planning - presentation template Sylwia Gut EC1526670 Analysis - The purpose of the application and the end-product Analysis - The purpose of the application and the end-product Client To the client ESCA (Edinburgh College Students Association) is running a two year project to help students live more sustainably. This includes cycle training, travel planning, fuel efficiency driver training and climate change education. Users To the users ESCA have commissioned you to create a four page website. The website must be engaging in design, include a minimum of two types of media and it must be easy to navigate between all four pages. Analysis - Application functionality Analysis - Application functionality First application function: First application function Generating random tips SWOT Analysis Second application function: Second application function Converting petrol distance, cost of petrol, amount of journeys and eventually will show the costs of petrol Application Design – Interface Design The key tasks Identify the key tasks required to develop the game Planning Developing Testing Evaluation Planning List each planning task Home page Tip Generator Case Study Petrol converter Development List each development task Creating home page Creating random tip generator Creating second page Creating petrol converter Testing List each testing task Navigation Testing input base and output work etc Identify what resources are required to develop the application Identify what resources are required to develop the application Hardware Hardware Personal Computer Keyboard Mouse Internet connection (router) USB pen drive Software Software Brackets – Alternative Dreamweaver, visual studio code Web browser Microsoft project – alternative Excel, Word PowerPoint – Alternative Prezi Microsoft Word – Google docs Paint net – alternative Photoshop Project plan Link or screen capture of your project plan file Questions? Thank you

Exit Planning for Business Owners

Transcript: Business Cost of a direct buyout is prohibitive Example 1: Inheritance Equalization CPA CASH BASED A multiplier of annual net earnings plus fixtures, equipment & inventory Step 2: Determine value Cross Purchase A Estate Retirement funds - Only principal (not appreciation) is taxed in estate Thank you! Business Buy-Sell Consulting Contract Non-Qualified Deferred Compensation Executive Bonus with Restrictive Endorsement Select Reward Plan Qualified Plan Vandalay, Inc. Value: $7M 3. CHALLENGE Goals Competence Growth Capital Asset CHALLENGE Jerry Kramer Business Equity Tax Sources $4MM "More than enough" - Issues and opportunities Value is based on reasonable expectations George Informal Business Valuation Owner's Family at Death Buyer buys life insurance on seller. At death, proceeds pay off principal on note Too much jointly held property Leaving everything to your surviving spouse Your will is not your will Improperly owned life insurance Success in wealth accumulation and successful wealth transfer Leaving retirement plans to your children Lack of liquidity Equally inequitable Everyone must pay estate taxes No integrated estate plan Valuation A QUALIFIED PLAN: Employee Stock Ownership Plan (ESOP) $8MM Principal at Death SOLUTION Invests primarily in company stock Permits borrowing to finance the cost Qualified plan testing & administration Annual stock valuation S or C corporation status Interest Only Common Techniques Vandalay Estate $7.5M Life Insurance Policies Capital Gains Tax Alternative Minimum Tax Rate Ordinary Income Top Tax Rate Federal Estate Tax Rate Want to treat all the children equally Financial & insurance professionals Insurance Estate/Wealth Transfer Planning Beauty is in the eye of the buyer Step 3: Sale to outsider/insider Tax Benefits Financial security - Sale to Insiders OR Outsiders Relationships Loyalty Stability Specific business owner issues: A multiplier of annual net earnings, plus fixtures, equipment & inventory Rules of Thumb Capital Transfers How will I pay for it when I retire? Will I have enough? Medical Practice: Charitable Family Gift Family Sale Price ...needed to support income goal Taxes Wealth Preservation Charitable Giving Don't Step In It: How to Keep Your Boots Clean When You Retire, Die or... Don't Quite Die Law Practice: What if I outlive my finances? COMPENSATION & BENEFITS: = Subject to taxation Real Estate Agency: 4 Steps of exit planning Family considerations What's the business worth? Exit planning many times effects your estate Maximize value Minimize taxes Maximize flexibility Put a plan in place; pre-fund, if possible Cash Bonus Nonqualified Deferred Compensation Phantom Stock Plan 19% of family business participants have not completed any planning other than writing a will, and only 37% have written a strategic plan Some children are in the business; some are not Competing Values Increase Cash Flow Increase Value Increase Return Example 2: Interest Only Note Want to pass on majority of the wealth after the second of the two parents die Summary When can I exit my business? Will my kids be able to - or want to - take over? Will it sell for what it's worth? How can I avoid huge taxes? Can it survive without me? How do I reward key employees/management team to stay? SOLUTION Capital Transfers Step 1: Set priorities Ten Estate Planning Mistakes Treat the children equitably 0-100% annual fee revenue, dependent on client retention Business broker or investment banker Survivor needs - Use proceeds to provide wealth to children not involved in the family business Dental Practice: EQUITY BASED Capital Transfers What if I die too soon? Set up irrevocable trust with 2nd to die life insurance policy Step 4: Estate/wealth transfer planning A percentage of gross annual commissions Interest Only Note - How It Works 67% of NYSE companies are owned or controlled by families Business appraisal firm 1. A Parents want business to pass to children (or key employees) A multiplier of gross annual revenues Family-owned businesses represent 62% of the U.S. workforce BUS Elaine Needs for Owners & Executives Sell interest in business to children for interest only note Financing Healthcare - The Sale Price to Income Challenge Considerations for Owners & Executives Stock Bonus Stock Option Stock Purchase One third of FORTUNE 500 companies are owned or controlled by families $6MM What are some industry standards? Compensation & Benefits ESOP Recapitalization Redemption/ Entity Purchase B Who performs valuations? Buy-Sell Techniques Family Business Issues "Sale too little" - issues and opportunities 2. Taxes Can be the Culprit $1.5M policy $2MM Sources of Funding for the Exit Plan Business value is appreciating Income Asset Stock or Assets Cross Purchase or Redemption Accounting Practice: Motivating Employees Inheritance Equalization-Solution

Business Planning Presentation

Transcript: FINANCING CORPORATE PREFERRED STOCK COMMON VOTING STOCK THE CLIENTS Alice and Andy THE CLIENTS THE BUSINESS INVESTMENT BREAKDOWN ALICE $250,000 Cash $375,000 Services $625,000 ANDY $250,000 Cash $375,000 Services $625,000 INVESTOR $1,000,000 INVESTOR $1,000,000 INVESTOR $1,000,000 INVESTOR $1,000,000 INVESTOR $1,000,000 INVESTOR $1,000,000 INVESTOR $1,000,000 INVESTOR $1,000,000 INTEREST BREAKDOWN Right to manage the general affairs of the corporation Right to get paid first and right to vote for funda-mental decisions QUESTION Is the use of common stock and preferred stock appropriate for Alice and Andy's corporation when the promoters have greater management rights, but investors have priority rights to payment? STOCK OPTIONS STOCK OPTIONS COMMON STOCK COMMON STOCK Common Stock: ordinary shares representing basic ownership and control rights. Last in priority of distribution of profits and liquidation Stockholders are not necessarily legally entitled to review company documents Arbitrary and constant fluxation of stock value Proportional issuance determines shareholder rights Passive stockholders are protected from any liability resulting from company action Potential for large annual return on investment PREFERRED STOCK Preferred Stock: shares representing specific voting rights in a company and/or securing priority access to the company's financial allocations. PREFERRED STOCK Receives priority in asset/financial distribution Higher and more regular dividends Best for long-term investments, generally low-risk Limited voting rights as described in operating agreement Profits are typically smaller Interest rates for preferred stockholders can fluctuate with the market CAN WE USE IT? APPLICATION TO OUR FACTS As common stockholders, Alice and Andy are undertaking a bigger risk than the outside investors. While they retain voting rights, they will be paid at the very end. Additionally, since they are contributing cash and services/property, they will be paying a capital gains tax on the latter, regardless of how well the business does. As preferred stockholders, the investors receive dividends in a predetermined amount per pay period. Because they want voting rights regarding major decision to the business, this must be spelled out in the operating agreement. More importantly, they will not be on the hook for company losses past their initial investment. Is this arrangement appropriate for the business entity at this stage of formation? TAX CONSIDERATIONS TAX CONSIDERATIONS S-CORP STATUS REQUIREMENTS FOR S-CORP STATUS No more than 100 shareholders Shareholders must be individuals (exceptions apply) USC/LPR shareholders only Only one class of stock + Timeliness/Writing Requirements PROBLEM Because TouchScreen, Inc. issued more than 2 classes of stock (preferred and common), the corporation is therefore ineligible for S-Corp classification. Because Alice and Andy are contributing services in addition to cash, they will be taxed that year, despite the business's success or failure. Additionally, since common shareholders are last in line to be paid, they will also stand to receive little or nothing upon liquidation, merger, etc. Investors, on the other hand, can use their losses as a tax write-off against personal income or taxable dividends. As holders of preferred stock, investors will only be liable for their initial contribution ($1 M each). TOUCHSCREEN, INC. GOES BANKRUPT. WHAT HAPPENS? TOUCHSCREEN, INC. DOES REALLY WELL AND MAKES $15 M THEIR FIRST YEAR. $15 M Applying 21% tax rate for corporations = $11.85 M Assume for simplicity's sake that the investors agreed to receive interest on their $1 M investments as dividends, as long as their initial principal of $1 M was met before anything else. This would leave about $3.85 M to distribute as dividends. $8 M $3.85 M Any dividends received by preferred shareholders (as an appreciation of their stock's value) will be taxed as a capital gain. Assuming a coupon rate of 8%, the preferred shareholders will receive about $80,000 each. This would incur a sum of about $620,000 after all preferred shareholders are paid. That leaves $3.23 M to be distributed. NON-TAX CONSIDERATIONS NON-TAX CONSIDERATIONS NEED MORE $ $750,000 The business needs $10 M to run for a year. After the $8 M from outside investors and $1.25 M from Alice and Andy, the business is still short $750 K. How will Touch Screen, Inc. raise the rest of its seed money? How do the common and preferred shares affect future investments? More Stock Options Any modification in the number of shares issuable by the company requires consent by voting parties & amendments to the operating agreement. Third Party Secured Creditor This will be difficult, given that, at the present time, the business has no collateral for such a substantial loan. Miscellaneous Factors If a third party investor decides to invest in the business with no physical property to serve as collateral, they may insist on an equity-to-debt ratio

Exit Planning

Transcript: High Growth Payback Good times Emma Accountability Culture - Outside Perspective - Chair board and management meetings - agenda, minutes & actions Is there a current employer that could be promoted? Find strategies on getting: More Growth Increase Profits Improve efficiencies Allow you to step away Create Real Value Nikki What do you know about Net Promoter Score? Business Growth & Exit Planning Specialists Systematization - Avoid the 'Owners Trap' Money TSB Bank 15 years Founder UK Water Group Ltd Start up - £3m, 53 staff, market leader, successful exit £6.4m Reaching Teaching & SCI Sales Ltd Mint Performance Established 2008 Create a pie chart representing the time you spend at work and assign a slice of each of the activities you do. What observations can you make? Start Up If someone handed you a cheque for £10m with the only situation being you had to use it to grow your company as quickly as possible, what would you invest the money in? Do you have an objective way of regularly measuring the satisfaction of your customers? What is unique about your business? (Compare against competitors) Stress ...'Andy has really helped bring some focus to our operations, holding our decisions and our practices to account. MD PM Partners Ltd Would some customers benefit from receiving a regular bill rather than a monthly variable bill? Not Over Reliant - Customer / Employee/ Supplier Can you reduce your stock levels? ...'He has helped me 'work on the business' rather than 'just in it', giving an outside perspective and a reality check.' MD - Vox Pops International Ltd How we help our clients '...Andy has been a great sounding board'. MD, Glasshouses Rank your employee from easiest to most difficult to replace. Financial Performance - Interactive Rank your customers by the percentage of your overall turnover each represents. Proud Why do customers request that YOU serve them? (If you don't know, ask your best customer the question) HR Associate Background - AA & Centrica Professional HR Services - Compliance to Disputes Plateau How can you better brand your products and services? (Image Audit) Could you replicate your business in another city or even another culture? Frustration See your Business from the Buyers Eyes The 8 Value Drivers £3 Million Decline What would have to change in your company for it to handle 10 times the number of customers? Recurring Revenue - Future Sales Sam Customer Satisfaction What sort of long-term incentive plan have you got to keep managers from leaving? What recurring problems could be fixed with a formal process or instruction manual? (This provides a great tool to coach employees to follow in your footsteps) Employee Performance / Engagement and Motivational Mapping What the Clients say Avoid the Owners Trap - Letting go!! Identify the most important raw materials. What other companies could supply them? What other products or services would your most loyal customers buy from you? Strategy - Agree clear vision & Objectives Pay by Installments? - charge more up front. Recurring Revenue - Contracts What benefits would you have to offer customers to get them to buy from you for a year in advance? Is there a layer of Service you could add to differentiate your offering? Thank you Customer satisfaction standards - Net Promoter Score Service Standards - Customer is King Culture amongst team Finding, Winning & Growing Profitable customers Creditors Day - review If all else fails - Bring in Terry Disillusioned Monopoly Control Is the method you use recognisable - will it show potential acquirer that customers value your products / service? The Consumables - are you selling these? Detailed blueprint on how to design a profitable, efficient Business that can grow and thrive without you with real future value. Debbie Major Turning Point Growth Potential Are you over Reliant? Marketing Manager Over 23 years Head of Customer Services Net Promoter Score - Measure your Customer Service standards How could you move to a recurring revenue from your customers? Mint Performance Team Could you productise your specialist consultancy service offering? Debtor Days Mint Performance Ltd Monopoly Control - Exclusivity & USP's Financial Performance - Financial Dashboard Growth Potential - Geographic / Horizontal / Vertical / Cultural The Brick Walls - The impact of them! Bookkeeping - Accountant Over 20 years Barclays International Avoid 'accountants speak' Monthly management accounts - Know your numbers Exit Planning:- The Sellability Score Dummy due diligence Build value drivers What are your Service Standards? Could you offer a maintenance contract to service what you sell? Background Could you evolve your business into a subscription or membership model? Advanced Growth What is the one thing that customers care most about? Client Services Director Over 15 years project management experience - IBM Helping to avoid the 'Owners Trap' Systems and Processes crucial Customer Satisfaction - Service

Business Planning Presentation

Transcript: The right service for the right Price A customer is sponsoring a friend? You are one of our Loyal customer? -> We reward it with promotions <- Dedicated personal assistance -> Live chat on the App <- - Unreliable Companies - Find the right price - Uneasy to reach them - No other customers experiences - Online payements -> Open the App -> Complete your profile (phone, adress, mail...) -> Select the area of expertise (list) -> Select one of the basic operations proposed or ask for an estimation -> Choose the company you want to hire -> Book an appointment and pay online Problem Solving Customer Segment Value Proposition Canvas Value Proposition Geographic: - Urban Customer - All around the UK (Starting in Cardiff) 3 clicks system to order Profiles updated with rankings, prices, reviews.. Paiements made via a secure page We will not release the money until the job is done On our aplication, we provide a list of professionals, sorted by : Behaviouristic - Always a thousand things to do - Wants to use the easiest was possible One single Leitmotiv -> We are on your Side <- Most of our partners are "Buyer-Supplier Relationships" We would also like to be "Coopetitors" with the Yellow Pages Financial Channel Phases: Awareness, Evaluation, Purchase, Delivery, After Sale An application on which customers are able to find a company to solve any household problems Help you find the perfect company for your needs How does it work? Business Planning Presentation Handy iD = + Platform / Network Household Problems Such as: - Plumber - Electricity - Laundry - Cleaning - Painting - Car fixing - ... Human Mohamed Al-Shehab 16058828, Mohamed Al-Malki 16068246, Ali Al-Safar 16074181, Robin Capestan 16063805 Our goals are the same -> The right Price for the right Service <- Office: 21,696£ (per year) Electricity and Water: 12,000£ (per year) Communication: 610.80£ (per year) Others: Taxes, Advertisment, Insurance Stationary: Estimated 6,000£ (per year) No subscrition fee Nice ranking and comparism system Reviews of the previous cutomers Easy interface and practical design Required Gains Expected Gains Desired Gains Unexpected Gains - Speciality - Rank (/5) - Price - Availability Currently there are two revenue streams: Demographic: - Male or Female - From 16 to 35 years old - From The C2 social class to the A Our Company: Handy iD Our Job: Provide an application of which everyone can access to a world of services, by relating companies and customers and by providing to both of them an easy to use application and a secure way to perform the transactions 2- Subscribing for a company is free but we propose an optional extra charge of 5£ per month to be seen on the "suggestion section" We've Got Your Back! How do we do that? Application: About 150,000 £ Staff Salaries: (Per year and per person) Directors - 18,000£ Staff Members - 10,200£ Assistants - 6,000£ Production References are available on the PowerPoint version of this presentation sent via turnitin Psychographic Activities - Lazy - Connected - Trending - Not very Handy Intellectual Channels Customer Relationship Cost Structure Revenue Streams Conclusion Channel Types: - Direct: The application/Web - Indirect: Throughout our Partners Physical 1- Each time a customer will book a specific service on our application, we will charge 3£ Key Activities Key resources Key Partners

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