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The 18 Holes of Exit Planning – Can You Score Each One?

By John Binkley

18 Holes of Exit Planning

For many, (myself included), business and golf are a perfect match. There is no denying the affinity many entrepreneurs have for a round of golf. According to Forbes, 90% of Fortune 500 CEOs play golf, while 80% believe the sport helps them establish new business relationships.

I’ve written in the past about the reasons why golf and business mesh together so well, from reinforcing the importance of patience and discipline, to teaching the value of manners and courtesy. You can learn meaningful lessons on the golf course that can directly and indirectly benefit how you approach your business.

At Generational Group, our relationship with golf has grown significantly in recent years. Since last year we have held a fruitful, strategic alliance with the legendary golfer, Jack Nicklaus, and The Nicklaus Companies.

This partnership has been great for all sides. We developed strategic growth plans for Jack’s companies and in turn, we benefit from his decades of wisdom and rapport. We are also actively invested in the present and future of the sport through Generational’s sponsorship agreement with Mito Pereira, one of the brightest prospects on the PGA Tour.

Our firm’s growing connection with golf had me thinking about how it relates to what I believe is the most crucial step in any business owner’s journey: Exiting their company. This is where the decades of hard work, sleepless nights, and tough decisions are meant to pay off. A time where you leave with complete financial security and an abundance of time to fill with the things you and your loved ones want to do.

However, selling a business for an optimal value won’t happen overnight. It is a process that requires the right expertise, insight and diligence – much like what it takes to finish a round of golf under par. Each hole presents a new challenge, but when approached correctly, you are one step closer to realizing your goal.

Here I’ll guide you through the 18 holes you need to sink to maximize the value of your exit.

1. Attending a Generational Growth and Exit Planning Conference

The first hole is about getting your bearings. Understanding the terrain. Assessing the wind speed. Gaining the knowledge you need to achieve success on every other hole.

With this in mind, attending a Generational Growth and Exit Planning conference, led by experienced M&A specialists, is a vital first step on the journey to exit. This gives you a wealth of information on what it takes to build a buyer ready company, and how to avoid the mistakes that can restrict the value of your exit.

2. Approaching an M&A Advisory Firm

Now you have a stronger understanding of what it takes to achieve the optimal exit, reaching out to a trusted, experienced, and preferably award-winning M&A firm like Generational will keep you informed and supported across your entire journey.

Think of us as the perfect caddy – we have walked this course thousands of times before and will advise you on the best shot to take no matter where your ball lands.

3. Business Evaluation

You wouldn’t sell your home without having a strong idea of what it’s worth, so why would your business be any different? A thorough, professional business evaluation will give you a meaningful estimate of what your company is worth right now.

By recasting your financials, analyzing your intangible assets, and identifying hidden value, you’ll be under no illusions about your company’s value. This is the first step in the proven Generational process.

4. Value enhancement

For many clients, once they discover their company’s value, they will want to increase it before putting it up for sale. This is when you will work with experienced advisors to develop growth strategies and unlock the hidden value within your business so that, when the time is right, you enter the market in the best possible shape.

Working with a team like Generational Consulting Group is crucial to achieving the growth you desire in the right time frame. They will ensure that you see results before you go to market.

5. Researching Potential Buyers

Don’t assume that your ideal buyer will be your competitor across town. From private equity firms to family office groups, there are many different types of buyers out there that could have a strong interest in acquiring your company, so it’s important to explore every avenue.

Plus, working with a firm like Generational Group means you won’t be restricted to buyers in your industry. You may be surprised at how interested buyers from a completely distinct industry may be in your proposition.

6. Crafting your Offering Memorandum

Your Offering Memorandum (OM) is the detailed document outlining the aspects of your business a buyer will want to know about, including:

  • Three years of historical financials
  • Five years of projected financials (based on recast numbers)
  • A full description of the company, including a complete history of the business, its current operations, and future growth opportunities
  • A SWOT analysis on the business (strength, weakness, opportunities and threats)
  • An analysis of the projected growth of your industry
  • An examination of key clients
  • Full disclosure of significant contractual relationships with suppliers/customers
  • An organizational chart with a focus on critical employees and their relationship with the company
  • A full list of off-balance sheet assets that make the company unique and successful

This is where you compile this information together alongside your dedicated advisor, ready to be sent out to interested buyers later in the process.

7. Developing Buyer Prospects

Once your company is “buyer ready”, it’s time to work with your advisor to refine the list of potential buyers. This will hone in on what type of buyer you would trust to carry on the legacy of your business, as well as securing an optimal value based on what your company has to offer.

8. Confidential Business Profile

Your Confidential Business Profile (CBP) is the hook that you cast out to your prospective buyers, to see which of them is interested in buying. It’s a 1-2 page teaser that highlights the key areas of your business.

However, unlike your OM, your CBP must not give away any information that would reveal who your company is until you reach the next stage.

9. Non-Disclosure Agreements

After your CBP has done an effective job at attracting buyers, you will need to arrange Non-Disclosure Agreements (NDAs) with prospects who are interested in learning more about your business.

This ensures that you can reveal more in-depth, classified information to your prospects, without the risk of these details leaking if they decide to pull out at a later date.

10. Sending your Offering Memorandum

When you have watertight NDAs signed with a prospect, you can comfortably send them your more comprehensive Offering Memorandum.

11. Buyer visits

Potential buyers will likely want to visit your business in-person before proceeding to make an offer, to verify that what you have presented on paper is accurate. This is a great opportunity to build a rapport with them and gain a sense of whether you would be comfortable with them acquiring your business and taking it forward.

12. Limited Auction

When your company is ready for sale and offers start to come in, our dealmakers will set up a limited auction for your company. By creating a competitive bidding environment among prospective buyers, this will whittle away the options and invariably increase the value and attractiveness of your company.

Generating this atmosphere in front of carefully selected strategic and/or financial buyers instantly makes your business more sought-after.

13. Negotiating Deal Structures

The negotiating table is where the value of hiring an M&A advisor really comes to the forefront. This experience and knowledge will help your team stay in control of proceedings, rather than be steered by savvy, experienced buyers, who will be actively trying to secure a bargain.

Additionally, having an M&A advisor involved typically speeds up the deal process and can also help overcome hurdles that often arise in the 11th hour of most transactions. Deals can break down multiple times before they reach a successful outcome. So even if you find yourself in a bunker on Hole 13, your advisor will help dig you out of it.

14. Letter of Intent

A Letter of Intent (LOI) puts the procedures for due diligence in motion, sets expectations around the deal structure, scheduling, and other big picture issues, and also offers an early way to resolve potential deal-breakers.

When negotiating with an experienced buyer, they will most likely craft an LOI that protects their interest more than yours. Again, this is where the expertise of an M&A advisor like Generational will help you past this potential rough patch, so your interests are secured.

15. Due diligence

With the 18th hole almost in sight, the due diligence stage is the one that will often throw up the most hazards and challenges. In many cases, this 2-3 month period will make or break your deal’s chance of succeeding. Many sellers get fatigued by the ongoing back and forth with buyers, while buyers lose momentum due to a lack of information given to them or inaccuracies in the documentation.

Navigating the 200-300 questions any credible buyer will present to you is vital to reaching the finish line, and here is where your “caddy” M&A advisor will not only provide crucial professional advice, but also valuable emotional support.

16. Definitive Purchase Agreement

A Definitive Purchase Agreement (DPA) is the beginning of the end of your journey. It is a recording of the terms and conditions between you and the buyer. Once this is signed, closing the deal is just a stone’s throw away.

17. Wealth planning

Prior to finalizing the sale, getting your wealth management plan in order can be crucial to maximizing and protecting your new liquid wealth. This will provide you much-needed security over your finances post-sale, and it’s the perfect foundation to fully embrace life after your business.

Working with a team like Generational Wealth Advisors will ensure all decisions are made in your best interest long before the deal even closes. Generational Wealth Advisors does not have any incentives to favor a particular strategy, asset class, fund manager or service provider - they work for you to help you protect and grow your newly created wealth.

18. Closing the deal

Finally, it’s time to pop the champagne, because once you sink this straightforward final putt, you have completed an optimal exit!

Find your perfect caddy with Generational Group

"Golf is not, on the whole, a game for realists. By its exactitudes of measurements, it invites the attention of perfectionists." - Heywood Hale Broun

The journey of selling a business is a long one and needs to be approached with precision and composure to achieve the best possible outcome. Hopefully this has helped you visualize what goes into this process more clearly, so you can approach each stage with total clarity of what is required of you.

By working with our team at Generational Group, you have the right partner by your side to guide you through this potentially treacherous course, ensuring that the years spent building your business is properly rewarded.

If you believe the time is right to tee up on the first hole, register to attend one of our comprehensive executive conferences today.

Greetings Mike. Thank you for the captivating and compelling presentation you made at the Phoenix presentation last week. Over many years in business yours was the most informative and well-presented presentation, on any subject, that I have ever attended! Your energy and enthusiasm combined with your concise and captivating support of your positions with easily understood examples and data was compelling.
Pete L.
I wanted to write you a quick letter to express our appreciation and our delight on the outcome of helping us through the process of our recent sale. We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.
Terry D. Wickman, President, Keytroller
We thank you Eric and Generational Equity making our dream come true.
Larry Moore, Owner, A Company Portable Restrooms
I must say that I have never worked with a more driven, competent and focused individual as Don Ho.
Jay Dinnison, Owner of Sharpe Mixers
Thanks to you, the entire GE team and especially Michael Goss for driving a great valuation, coaching me and driving the process across the finish line. Please let me know if there is anything I can do to support GE going forward. P.S. Given my experience with GE I felt comfortable enough to sign up with Generation Wealth Advisors!
Tom Currier, Former President & CEO, Rackmount Solutions
We were happy to see the interest in our company and what we cherished has not just a valuable company but an important company to the communities we served in.
Larry Moore, Owner, A Company Portable Restrooms
I couldn’t have asked for a better team than Michael and Deborah. We couldn’t have done it without them.
Robert Evans, President and CEO of Mealtracker Dietary Software
Michael worked tirelessly, He followed every lead meticulously and urgently to make sure nothing was missed.
Robert Evans, President and CEO of Mealtracker Dietary Software
We knew it would be a difficult task to have someone really understand our business and our market, prior to researching a possible buyer, so it was imperative that we found someone of your caliber, with definite proven experience in this area.
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
Generational Equity’s assistance was invaluable in compiling and marketing our business.
Bil MacLeslie, CEO, ipHouse
Thank you again for all your guidance and support. Any company will achieve what they intend, if they have you on their team!
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
We are very happy with the end result, and are very happy to be able to move forward with all of our future growth plans.
Rick Nowak, President/CEO, Kurz Electric Solutions, Inc.
I wanted to take this opportunity to thank you for all that you have done for us. Not only did you take care of all the aspects of the sale but took extra care to make sure we knew what it looked like every step of the way. I will definitely recommend your company to anyone that is in a position to or looking to exit their business.
Shane and Johanna Kline, Owners of Vision Upfitters
I quickly recognized that Don was working for Sharpe Mixers above all else, and held our interests above others.
Jay Dinnison, Owner of Sharpe Mixers
The professionals at Generational Equity then helped develop a roadmap for enhancing the value of the firm and an evaluation report. This was completed by June 14, 2021. We then developed the Confidential Information Memorandum and put Taylor Studios, Inc. on the market by July.
Generational Equity’s professional staff helped me every step of the way. Their network and professionals are the only reason I sold my company this quickly. For me this is a once in a lifetime sale and I was unfamiliar with the process. I was able to lean on them with questions and concerns.
Betty L. Brennan, President, Taylor Studios
I am pleased that I was able to work with Andrew Byrd throughout this experience. From the first meeting we had in Minneapolis I felt that I was in good hands. His knowledge and expertise is second to none. He guided the process consistently throughout. I feel lucky that I was pared with Andrew and could not be happier that I chose Generational Equity to handle this major life event. Thank you Andrew and GenEq for everything!
Eric Erlandson, Owner, Action Fastenings, Inc.
Your wisdom and experience were invaluable to me during this once-in-a-lifetime transaction.
Ralph Noblin, President of Noblin & Associates
The help you provided us during each step of this process made us feel very comfortable and confident we were selecting the right approach to transition our Company.
Andy Graham, Vice President, Modern Heating & Plumbing
Generational Equity educated and informed us – so that we could be on the upside of a good decision (to sell).
Bil MacLeslie, CEO, ipHouse
I would like to thank you and your firm, Generational Equity, for being our valued advisors in our journey.
Bil MacLeslie, CEO, ipHouse
I need to say an immense thank you to Don Ho for his stellar work ethic, attention to detail, and tireless effort. Also thank you to the whole crew at GE! Without you, Don could not do such a phenomenal job. We were shooting for closing and funding before the end of 2020, due to the uncertainty of the political landscape and taxes. I am happy to report we closed last week and will be funding tomorrow.
Dr. Caty J. Catron PhD, RN, VA-BC – Owner, Vic The Picc, LLC
We had the pleasure of working with Mr. Ahmad Behjati Managing Director, M&A, for Generational Equity during our acquisition of Papa's Dodge in late 2021. Generational Equity and Mr. Behjati represented and marketed Papa’s Dodge. As our primary contact, Mr. Behjati was professional in every facet of this acquisition process, conveying valuable advice most times and assisting us in every step of the process.
Rick Greene of Dobbs Equity Partners LLC
Through the sale process, Generational brought in several interested buyers and we closed in about 6 months. I am so glad I accepted that invitation to the conference and could not be happier with the whole process. The team at Generational coupled with their knowledge and guidance was so valuable that in the end, I know I could never have done this on my own!
JoAnn Ellis, Owner of Fondren 5 Star Kennels
I decided to attend the conference and hopefully receive some guidance on how to structure an exit plan of my business. Upon arriving at the conference, I was so impressed with the presentation given by Generational Equity that I set a future appointment that week to discuss the possibility of selling my business with their Senior Managing Director David Robinson.
JoAnn Ellis, Owner of Fondren 5 Star Kennels
T.D., thank you so much! You are a great leader! I love how you are using your gifts and talents to better others. You are clearly a GREAT COACH! This 3 day session undoubtedly changed the future of our business, and very well may have been the sole catalyst to save my company, my health and my marriage! A genuine “thank you” from the bottom of my heart.
Bryan D. Horn, Owner, Over Under Clothing
We were represented by Michael Goss with Generational. The due diligence was grueling and exhausting, but Michael propped us up and kept us motivated throughout the process. Debi and I continued to ask each other how we could possibly make it through this process without the assistance of Michael. Michael's professionalism and knowledge is absolutely amazing, and we are so blessed to have had him by our side as we made our future dreams come true.
Bob and Debi Lee, Owners of BL Technology, Inc and BL Tl Services, LLC
The most important contribution I think Ahmad made was with his personality and work ethic. He is sincere, efficient, and very hard working. He was available to me at all times, whether it was for specific detail of the negotiation or just to talk through the bigger picture. He listened, advised, and recommended, but never forced his idea or opinions. In the time we worked together, he became a valued colleague and also a friend.
Salvo Stoch, Founder and CEO of Sleeping Partners
The process was much more involved than I expected and your help, experience and advice was a big factor in making the negotiations go as smoothly as possible.
Terry D. Wickman, President, Keytroller
After attending a conference with GE, I decided that the value they bring would be worth the expense and as soon as I started working with them, I realized that was the right decision. When we started to get LOIs, Fred Zweifel took the lead on the communication and supported negotiations throughout the process, which got tricky as we moved forward. I learned that it can be common for companies to make a great offer then work to erode that price with their discoveries, but Fred and the GE team kept that from happening.
Caroline Connelly, CEO, OptoTest