Value Drivers & Best Buyers
Jeff Kraai, President
Exit Strategies, Inc.
Copyright © 2012 By Exit Strategies, Inc.
Personal Snapshot
“Personal Snapshot”
HomeMarriedFavorite MealAttitudeHobbiesWeaknessesStrengths-
Vancouver, WA
Laurie / Interior Designer
Thai Food
Hard work creates luck!
Bicycling, Backpacking
Pens
Committed to Success
Heart is inBest DogTop VacationFavorite MovieProud ofLackingMost enjoy-
Montana
Dachshunds
Southern Caribbean
Breakfast Club
Perfect Service (try me)
Patience (and hair)
Closing Deals! 
Best Quote- “In this life you don’t get what’s fair….
you get what you negotiate for.”
-Unknown
Copyright © 2012 By Exit Strategies, Inc.
‘Transition’

Transfer All or Part of Company:
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Family Member
Key Employee
Partner
Competitor
Strategic Buyer
Investment Buyer (Third Party)
Private Equity Group (PEG)
Overall Process is an “Exit Strategy”
Copyright © 2012 By Exit Strategies, Inc.
Key Questions
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Timing
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Business Value
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Sales Price vs. Yield
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Wealth Preservation

Deal Structure / Taxes
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Confidentiality
Copyright © 2012 By Exit Strategies, Inc.
Key Questions
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Premise Lease / Real Estate
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Key Employees
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Best Buyers / Competitors
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Training & Consulting Period
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Sales Process
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Who Should Help / Fees
Copyright © 2012 By Exit Strategies, Inc.
Business Value
= Appraisal
Numbers
Numbers + Story = Transaction Value
(Valuation)
(Analysis)
Copyright © 2012 By Exit Strategies, Inc.
Preparation: “Value Drivers”
①
Timing
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Personal / Business / Market
②
Financial Trends
③
Owner Involvement
④
Management Quality
⑤
Client Risk Factors
Copyright © 2012 By Exit Strategies, Inc.
Preparation: “Value Drivers”
⑥
Asset Quality
⑦
Reputation / History
⑧
Financial Cleanliness
⑨
Professionalism

⑩
Systems & Procedures
Competition / How Fit
Copyright © 2012 By Exit Strategies, Inc.
Business Value: “Example”
Company “A” vs. Company “B”
‘Numbers Only’ Valuation =
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Timing
Financial Trend
Owner Involvement
Management Quality
Client Risk Factors
Asset Qualityyrs. old
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Professionalism
Reputation / History
Financial Cleanliness
Competition / How Fit-
$2,750,000
Ready
Upward
25-30 hrs./wk
3 Mgrs ~ 8 yrs.
$2,750,000
Not Ready
Downward
65-80 hrs./wk
3 Mgrs ~ 9 mos.
50%/6 Co’s/14 Adj.
50%/2 Co’s/3 Adj.
18 Veh. ~ 6 yrs. old
Sys. & Procedures
Solid
Clean
Strong
Range of Value:Copyright$2.9
- 3.1M
© 2012 By Exit Strategies, Inc.
18 Veh. ~ 14
No Sys. & Procedures
Weak
Dirty
Weak
$2.0 -2.4M
Summary: “Value Drivers”
①
Timing
⑥
Asset Quality
②
Financial Trends
⑦
Reputation / History
③
Owner Involvement
⑧
Financial Cleanliness
④
Management Quality
⑨
Professionalism
⑤
Client Risk Factors
⑩
Competition / How Fit
Copyright © 2012 By Exit Strategies, Inc.
Questions ?
Confidential at:
Office: 1.800.388.1096
Cell: 1.503.577.5649
Info@ExitStrategies-DR.com
Copyright © 2012 By Exit Strategies, Inc.
Types of Buyers
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What Determines?
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Size / Gross Sales
Profitability- (Adjusted Earnings / EBITDA)
Types of Buyers?
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Family Member
Key Employee
Partner
Competitor
Strategic Buyer
Investment Buyer (Third Party)
Private Equity Group (PEG)
Copyright © 2012 By Exit Strategies, Inc.
Buyers & Deal Structures
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Financeable vs. Non-Financeable
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Deal Structure Variables
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Cash
Seller Carry-Back Notes
Earnouts
Compensation Package
Consulting Fees
Benefits
Retain Partial Ownership (Stock / Recap.)
Copyright © 2012 By Exit Strategies, Inc.
Locating Buyers
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Where?
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General Business Brokerage Websites
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Industry Websites
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Industry Publications- R&R, Cleanfax, C&R, etc.
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Newspapers- Local, Regional or National
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Direct Mail
How? (Very confidentially.)
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Generic Ad
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Executive Summary, NDA, Resume, PFS
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Qualify Financially & Otherwise

Approval by Seller
Copyright © 2012 By Exit Strategies, Inc.
Transition Team
Attorney
Broker
Estate
Planning
Attorney
CPA
You
&$
 Maximize
Yield
 Minimize
Risk
•
•
•
Wealth
Advisor
Copyright © 2012 By Exit Strategies, Inc.
Financial
Legal
Emotional
Thank You !
Confidential at:
Office: 1.800.388.1096
Cell: 1.503.577.5649
Info@ExitStrategies-dr.com
Copyright © 2012 By Exit Strategies, Inc.