The document discusses exit planning for business owners looking to sell their company. It outlines that only 29% of businesses making $2-30 million in revenue typically sell. It then lists the top 7 reasons why some businesses are never sold, including poor records/data, profitability issues, and the owner being too tied to the business. The document proceeds to define exit planning, discuss the 4-step planning process, list the advisory team roles, review 20 criteria that attract buyers, and provide 16 initial steps owners can take to begin the exit planning process.

1. Top 7 Reasons Why 3 out of 4
Businesses Won’t Ever Be Sold
Tilt the field in your favor
and sell your business for top dollar
Erik Bunaes, Principal & President, Endorphin Advisors
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2. Course Overview
 Businesses Sales Data
 Top 7 Reasons Why Businesses Are Not Sold
 Introduction to Exit Planning
 Exit Planning Process
 Professional Exit Planning Advisory Team
 20 Criteria that Attract Buyers
 Where to Start - 16 Steps to Get Process Started
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3. Businesses sold in U.S.
 Less than $750K revenue - 18% are sold
 $750K - $2M revenue - 25% are sold
 $2M - $30M revenue - 29% are sold
 $30M+ revenue - 33% are sold
Higher revenue = increased chances of sale
Source: CABB & Tom West
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4. Top 7 Reasons why some businesses are
never sold
1. Poor books, records & data (#1 obstacle to selling a business)
2. Poor profitability or decreasing revenue (poor competitive position
in market, uncompetitive products, ineffective marketing, etc.)
3. Weak (or non-existent) business & marketing plans
4. Owner is the business (weak or no management team,
unstructured business processes, licensing issues)
5. Not prepared for due diligence process
6. Inadequate (disadvantaged) lease or uncooperative landlord
7. Owner uncommitted to selling (seller inflexible in structuring deal,
uncertain about financial needs, no plans for life “post sale”
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5. What is Exit Planning?
Exit Planning is a comprehensive plan of action where
business owners ask and answer all critical business,
personal, financial, legal and tax questions involved in
selling and exiting a business on their own terms.
Creating an effective Exit Plan involves a wide range of
issues, topics and areas of expertise - and potential pitfalls -
where success is best achieved with the assistance of
professional, experienced advisors and experts.
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6. Exit Planning Process
Exit Planning covers four broad steps:
1. Data collection
2. Valuation & Analysis
3. Strategy & Recommendations
4. Implementation & Execution
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7. Step 1 - Data Collection
1. Initial Meeting
2. Questionnaire to gather information and
assess situation, goals and needs
3. Interview
4. Review
5. Research
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8. Step 2 – Valuation & Analysis
1. Current, certified business valuation
2. Owners long-term financial needs & plan
3. Develop, implement strategies to maximize value
of business prior to a sale
4. Tax strategies (we cannot underestimate the
significant impact that effective tax planning can
have on the post-sale financial gains)
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9. Step 3 – Strategy & Recommendations
1. Market value of business, current conditions
2. Financial terms & alternatives of potential sale
3. Exit options
4. Strategies to increase value and “curb appeal” (or
“salability”) prior to a sale
5. Strategies to position business for revenue growth
and ensuring competitive market positioning
6. Strategies to minimize & defer taxes
7. Legal options and considerations
8. Specific action plan (who needs to do what, and
when)
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10. Step 4 – Implementation & Execution
1. Pre-Transaction due diligence (preparation for the
real thing)
2. Tax & estate plans
3. Implement plan to maximize value, grow revenue
and ensure competitive market position
4. Wealth management plan, needs, goals
5. Implementation of exit strategy (sale and exit of
business)
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11. Exit Planning Advisory Team
1. Investment banker, M&A advisor or business broker
2. Attorney
3. CPA
4. Wealth Management advisor
5. Estate Planning advisor (may be attorney, CPA or
Wealth Management advisor)
6. Insurance professional
7. Management consultant (Endorphin Advisors provides
business development and marketing strategy
consulting and acts as project manager in exit
planning process)
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12. 20 Criteria That Attract Buyers
(1 of 3)
1. Audited (or CPA-reviewed) financial statements
2. Accurate sales, accounting and data records
3. Copies of income tax filings
4. Low or manageable debt, receivables outstanding relative to
revenue/income
5. Realistic asking price, supported by recent valuation and sales
information
6. Increasing revenue trends (last 3-years)
7. No unresolved legal, liability, tax issues
8. Strong marketing strategy and plan
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13. 20 Criteria That Attract Buyers
(2 of 3)
9. Track record of profitability (3-years)
10. Strong management team (in addition to owner) and
experienced employees that will stay with business
11. Appropriate HR-related practices, hiring/firing practices,
disciplinary practices, performance reviews, etc.
12. Strong operational procedures and practices (documented)
13. Strong competitive marketing position & product line-up with
track record of innovation
14. Appealing, organized office, store, factory or physical plant
15. Loyal, repeat customers
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14. 20 Criteria That Attract Buyers
(3 of 3)
16. Updated arsenal of marketing tools (web site, newsletter,
brochures, customer lists, standard proposals, etc.)
17. Appealing competitive market environment (level of barriers
to entry for new competitors)
18. Appropriate level of geographical distribution of sales (not
focused in one area)
19. Strong business relationships (with vendors, partners, service
providers, financial institutions, etc.)
20. No Surprises during the deal or due diligence process!
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15. Where to Start
(1 of 3)
1. Understand that successfully selling and exiting a business can take
time (possibly 2-4 years)
2. Start early (even before you make firm decision to sell) and be
prepared to continue working in this business for a couple more
years (at minimum)
3. Get a current, certified appraisal of value for your business
4. Get appraisals for machinery, equipment and real estate (for buyer’s
financing applications)
5. Outline future financial needs & goals for you and your family
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16. Where to Start
(2 of 3)
6. Create a picture and plan of what you will do with yourself after
selling and exiting your business
7. Examine your business and see what you can fix up (both short term
and long term fixes). Get help to get your business into it’s best
possible shape
8. Start building business plan and buyer due diligence package
9. Start building team of professional advisors, all with significant
experience selling businesses
10. Seek advice on factors related to business sales (comparable sales,
financing availability, competitive environment, potential buyers,
state of economy, etc.), and develop strategy and timeline for
listing business and approaching specific, potential buyers
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17. Where to Start
(3 of 3)
11. Create concrete financial plan for investing proceeds from sale
12. Seek advice from tax attorney or CPA to develop strategies to (legally)
minimize and defer taxes from sale
13. Hire experienced attorney to conduct full legal document review and
inventory
14. Get your family and all co-owners on board with your plan. Create a
transition strategy that includes timelines for you, senior management
team, other owners, and employees (especially if family are in business)
15. Update inventory, write off expired inventory and uncollectible debts, pay
down (or pay off) outstanding debt
16. Maximize profits by reducing unnecessary expenses and perks.
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18. Discussion Review
 Business Sales Statistics
 Top 7 Reasons Businesses Don’t Sell
 Introduction to Exit Planning
 Exit Planning Process
 Professional Exit Planning Advisory Team
 20 Criteria that Attract Buyers
 Where to Start – 16 Steps to Get Process Started
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19. Thank You
Erik Bunaes, Principal & President
Endorphin Advisors
Phone: 415.578.0064
Email: Erik@EndorphinAdvisors.com
Web: www.EndorphinAdvisors.com
Endorphin Blog: http://blog.endorphinadvisors.com
www.facebook.com/EndorphinAdvisors
www.linkedin.com/in/erikbunaes
www.youtube.com/user/endorphin1995
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20. About Endorphin Advisors
See www.EndorphinAdvisors.com
Endorphin Advisors is a unique, boutique management consulting firm and marketing
agency. We help businesses develop and implement short and long term strategicstrategic
plans, often in preparation for certain defined events such as acquisitions, mergers,
acquisitions,
capital raising events, business start-ups, adding staff, launching new products or
start-
services or selling the business itself.
Started in 2005, Endorphin Advisors helps build leadership and organizational capacity and
organizational
provides day-to-day operational, marketing and financial consulting services. We
day- to-
develop innovative, visionary, operational business development and
marketing strategies to help businesses grow and reach their fullest potential.
We specialize in inbound marketing strategies; lead generation strategies; content
development strategy and management for inbound marketing initiatives.
initiatives.
Endorphin Advisors also provides specific exit strategy and business certification services
that provide financial, operational and leadership capacity baselines.
baselines.
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