|
|
|
|
StrategicPlanning360.com - Strategic Planning Information At Your Fingertips... |
|
|
 |
|
Documenting the Exit Strategy in Your Business Plan
All investors greatly desire and are motivated by a clear picture of a company's exit strategy, or the timing and method through which they can "cash in" on their investment. This picture best comes into focus when the key valuation and liquidity drivers of the company are clearly delineated. An excellent method to accomplish this is through descriptions of comparable firms that have had successful liquidity events, either through acquisition, merger, of initial public offerings (IPOs). It is helpful to show other companies in your market, or similar companies in other markets, who have successfully exited, and how and why these companies were successful. For instance, were they successful since they acquired a large customer base? Or were they successful since they accomplished fast growth or high profit margins? It is also important to tie their success to their exit price. Was the exit price based on earnings or the number of customers the firm had at the time? The business plan should tie these metrics (e.g., exit price of $X per customer) to the business to determine its future price. The most common exit strategies in business plans are IPOs or acquisitions. While the method of exit is not always crucial, the investor often wants to see the decision to better understand the management team's motivation and commitment to building long-term value. If acquisition is the selected exit path, then the business plan should detail potential companies that might want to acquire the firm in the future and why. Likewise, if an IPO is expected in the future, the business plan should document the financial metrics of the company that make it ripe for this type of exit. In most cases, investors only make money when the business reaches a successful exit event. As such, it is critical that business plans explain the expected exit, detail why this exit was chosen and validate a realistic exit price. As President of Growthink Business Plans, Dave Lavinsky has helped the company become one of the premier business plan development firms. Since its inception, Growthink has developed over 200 business plans. Growthink clients have collectively raised over $750 million in financing, launched numerous new product and service lines and gained competitive advantage and market share.
 Strategic Planning News for Wednesday, Sep 8, 2010...
Google News |
|
|
|
RELATED ARTICLES
Invalid Excuses for Poor Business Results - The Economy Note to Rite Aid and CVS: It's not about the economy Why Create an Annual Plan? Can you imagine going on a road trip without knowing your destination? Or, building your house without plans? The same can be said about running your business without a plan. How to Write a Business Plan Market Analysis Writing a business plan is an essential part of the initial strategic planning of any company. One thing, which seems to hang up most entrepreneurs, is figuring out what kind of data and information goes into the Market Analysis section. So often entrepreneurs will attempt to bluff or BS their way thru it. Often you find those with MBA write meticulous Market Analysis sections and although they may have little if any true entrepreneurial skills going into a new business, their business plans are sure to impress. But you need not be an MBA to write a proper Market Analysis section in your business plan for your next business. Is Plan B Ready? Business owners and entrepreneurs are, by nature, risk takers and adventurers. If we didn't have that "optimism gene" floating around, not much of any progress would ever get done. But every so often the adventurous get in trouble. 6 Steps To Laying Out Your Competitive Strategy Why do so many companies languish and watch as their business turns into a zero profit zone, while others seem to thrive? Microsoft Great Plains Implementation: Placement/Recruiting Agency example ? overview for consultant Microsoft Great Plains does wonderful ERP job for horizontal markets and clientele. However in our opinion placement software market is underserved and needs custom modules to be developed. In the case of Microsoft Great Plains we see numerous examples of in-house or outsourced customization done for Great Plains Dynamics/Microsoft Great Plains in order to automate placement agency workflow and processes. In our opinion Great Plains is good choice, considering the side of placement and recruiting companies: mid-size or even small. Let us give you highlights from our consulting practice. Making a Decision to Outsource: Strategic Constraints Many companies are reluctant to dive into outsourcing ocean because of various reasons of strategic nature. As far as strategic goals are touched upon, managers are concerned with the following issues: Breaking the Growth Barriers in the Information Technology and Software Sector There's nothing automatic about corporate growth, particularly in the information technology industry; build it and they will come is a myth. In the real world there is either a structured, process-driven growth cycle, or stagnation-and stagnation is automatic. Inherent to growth cycles are barriers, real-world business challenges that put some software companies out of business and spur others on to break through those barriers to higher levels of success. Overcoming those barriers is the very definition of growth; when you break through a barrier, you've achieved growth. How to Achieve E-commerce Success ?You Gotta Plan! Before becoming a netpreneur, I was an entrepreneur. First, I owned a successful child care center which grew to capacity in less than two years. When I sold that, I bought a little flower shop that had less than 300 customers and grew it to what it is today, one of the most successful, award winning companies in South Florida with more than 7,000 customers who purchase from us on a regular business. To better serve our customers, we took our business to the Internet. We still have a brick and mortar storefront, yet everyday we receive more and more customers via the Internet. Pave the Way to a Successful Strategic Plan Many very successful business owners may never have had a formal strategic plan. Some think, "Why do we need to do strategic planning? We're doing great just like we are." Microsoft Great Plains in Agriculture ? implementation highlights In this small article we'll concentrate on farmers associations and non-profit state-sponsored organizations, dealing with subsidized state and federal programs distribution and management ? loans to farmers and rural communities. As we realized this is relatively narrow market niche and it is almost ignored by software developers. In the typical case you should take generic ERP application, such as Microsoft Great Plains and integrate it with legacy systems or create custom piece in Great Plains to serve your association needs. Nine Succession Planning Mistakes Small Businesses Should Avoid 1. Attempt Succession Planning Without Other Strategic Plans. Succession plans define a company's business heirs, but what will they inherit? They will inherit a company with no vision, no strategy to deal with the competition, and no plans for changing the way it does business, if the current owners spend too little time planning for the future. Every firm should have strategic plans to increase its market value. During the election we heard about Ohio's Economy Much of what we heard in the mass media about Ohio and the down and out economy was the fiction of spin-doctors of politics who wanted to oust the current sitting President. On further review and first hand observation and experience Cincinnati has people moving in and economic expansion. It is in a good spot with decent quality of life, plenty of jobs and an expanding set of suburbs. Just cross the river into KY and you get a glimpse of the reality. Scheduling of Additional Auto Detailing or Mobile Car Wash Units If you own a mobile car wash business or auto detailing business then you realize that when you are parked working you are making money and when you are stuck in traffic you are losing money. Sure you can say when you are in traffic people see you and write down the phone number, but you are not making money, that is potential future income, which is work you still must do in the future. Many auto detailers do not schedule properly and therefore get into trouble in that they attempt to expand before they have maximized their schedules. Six Key Areas For Evaluating A Strategic Alliance Strategic alliances are increasing at a rapid rate. It is good for business, good for the consumer. A strategic alliance is similar to a joint venture. Everyone remains in his or her own entity, yet come together for a single purpose or period of time to create something that could not otherwise be created. Corporate Contingency Planning Part 1 Insurance Requirements in Franchised Companies Franchised companies often require what some believe to be excessive insurance requirements. This is because so often if a franchise is sued for any reason that the Lawyers go after the big money of the franchisors and name them in the lawsuit. It is amazing that a lawyer can write garbage in a lawsuit and file it in court and if you do not hire another lawyer to fight them, you could lose your entire life's work and company. But our legal system as most entrepreneurs agree is a complete joke and more closely represents the extortion tactics of the mob than any legitimate sense of fairness or truth. This is why franchisors must require huge limits of liability insurance and additional insured certificates as part of the franchise agreement. Going Self-Employed ? A Few Handy Hints The day you decide to take the plunge and work for yourself will be one of the most life-changing choices you ever make, whether starting a company large or small or as a freelance; from the very first moment of being self-employed, you and you alone will stand or fall by your decisions and actions. You will be responsible for steering your business through all its ups and downs, good times and bad times with no guarantee that everything will turn out right in the end. Defining Go for It Business Goals Many business start-up kits or consultants will tell you one of the first steps to starting a business is to define your business goals. Your goals may differ from the goals of another individual, for example; some people want freedom to do what they want to do, whenever they want, and without having to report to someone else. For others, the goal might be financial security. For another, flexibility or creativity might be their goal. Pressure Washing Entrepreneurs Can Help With Government NPDES Permits If you own a pressure washing business one of the smartest things you can do is get involved with the local and regional enforcement for storm water environmental laws. The reason being is they do not understand the washing process of the industry and you can assist them with pertinent information. Secondly you learn about opportunities in the market and third, you can prevent really bad legislation which could potentially put you and your business out of work.
|
Copyright © 2005 - 2010 StrategicPlanning360.com. All rights reserved. Legal Info Site Map |
 |
