Final Presentation

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by Connected, But Alone Podcast1 view·Updated Jun 10, 2022
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Final Presentation for BUS 295

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  1. Hi, my name is Shannon Welch and this is my final presentation for business 2 95.
  2. We're gonna talk about planning the harvest one of the most
  3. important parts that a lot of entrepreneurs do not think about
  4. 1st. What's the importance of the harvest?
  5. What is
  6. the harvest
  7. is essentially how investors get out or exit a business to
  8. get the most out of what they put into the business.
  9. Why do we need to plan for the harvest? The reasons for harvesting can vary,
  10. so people exit a business because they simply are done with the
  11. business because of an illness or a financial crisis or economic crash.
  12. How do we harvest a business?
  13. There are four different ways to harvest a business.
  14. The benefits of harvesting
  15. can increase profitability,
  16. you're reaping the full value of what you put into that business and you
  17. also free up resources for other ventures
  18. that you want a person lives entrepreneur.
  19. It also reduces risk.
  20. Mm
  21. Now we're gonna look at some statistics,
  22. some statistics about harvesting the business
  23. or exiting the business as an entrepreneur
  24. is a study done by the ups.
  25. Um and they were asked
  26. A bunch of entrepreneurs and costume statistics on them and they revealed
  27. that 48% of the business owners doesn't have a formal exit strategy.
  28. The second statistic is 66% of business owners that privately
  29. held businesses are not familiar with their exit options.
  30. geez,
  31. the next thing that we're going to look at is the methods of harvesting
  32. the four methods of harvesting a business
  33. is one, you could sell the company
  34. two, you can distribute the cash flows
  35. three, you could go public which is basically I. P. O.
  36. Or four, you can private equity recapitalized.
  37. Okay
  38. number one you can sell the company.
  39. This is the most common way to harvest or exit a business
  40. is to simply sell your business to a company or to another person.
  41. Number two
  42. distribute cash flows,
  43. the orderly withdrawal of an owner's investment in the form
  44. of the firm's cash flows,
  45. number three
  46. going public, what does going public mean?
  47. It's when a firm or a business for the first time allows
  48. the general public to buy stocks slash shares in the company.
  49. Okay.
  50. Private equity recapitalization. So this is kind of unique
  51. and it's where a
  52. the other investors that are in the business provide funds in the
  53. form of debt to the business and that would allow the entrepreneur,
  54. the owner of the business to cash out essentially
  55. their investment that they have put into the business.
  56. And those are the four methods that you
  57. can successfully or effectively harvest your business.
  58. Now we're going to take a look at valuation and payment.
  59. So how we create value or build a evaluation of what the business is worth.
  60. The value is created when a firm's return on the invested
  61. capital is greater than the investors opportunity cost of funds.
  62. The opportunity,
  63. cost of funds is the rate of return that could be earned on an investment
  64. of a similar risk. So basically it comparing
  65. number two
  66. payment options, how do you get paid?
  67. Number one?
  68. So the firm's assets
  69. too, so it's stuck
  70. three.
  71. If the buyer entrepreneur owns the second business, he can merge the two together.
  72. Okay,
  73. now we're gonna take a look at developing a harvest plant,
  74. this is gonna
  75. show you how to develop an effective harvest strategy,
  76. so you can get the most out of the harvest
  77. now when exiting a business,
  78. you don't think about this until it's too late.
  79. As we looked at the statistics earlier,
  80. most entrepreneurs don't think about the business ending when
  81. they're in the middle of starting the business,
  82. but it's important to have a plan for when that time comes,
  83. because the time will come eventually.
  84. So number one is to anticipate the harvest,
  85. anticipate the fact that you will exit the business at some point.
  86. The business will end at some point and you need to have a plan for that.
  87. Number two
  88. expect conflict, especially if you have other investors in the business, um,
  89. stockholders,
  90. different things going on within the business of
  91. upper management part where people can disagree how businesses
  92. to beat up sold and how best to reap the benefits of what everybody put into it.
  93. Number three
  94. get good advice,
  95. make sure that your vetting the people that you're
  96. listening to on the advice of how to effectively reap
  97. Harvest all the stuff that you put into the business and make sure that
  98. you're getting the value that you felt like you put in at the end.
  99. # four.
  100. Figure out what motivates you, Why did you start the business?
  101. What motivates you in life? What you're trying to do
  102. and what you're trying to get out of it. What did you put into it?
  103. Think about your motivations.
  104. five, what comes next?
  105. Most entrepreneurs can be serial entrepreneurs and
  106. they're always looking for the next thing.
  107. It's important to have a plan so that you're not idle right after the harvest.
  108. What are you going to do next? Are you starting another business? Are you retiring?
  109. Those are things to start thinking about.
  110. So
  111. to have an effective harvest plan, anticipate, expect conflict, get good advice,
  112. find out what motivates you and find out what's next for you.
  113. Okay,
  114. mm
  115. Now here are the sources where I have gotten all this information. one.
  116. This information from that I presented to you in this sideshow.
  117. Thank you for watching