InKnowVision February 2014 Buy-Sell Problem Solver PPT

The Buy-Sell Problem Solver
A Turnkey Solution for Professionals Who Serve
Business Owners

(630) 596-5090

www.InKnowVision.com

All Content Copyright © 2014

@InKnowVision
InKnowVision, LLC
InKnowVision

Are you finding:
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Hard to differentiate
Competition  harder to develop new business
Business owners are very hard to engage
Comprehensive planning scares clients
Need to systematically increase revenues fast



1. Prospect Already Has One
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You have to wait until the incumbent dies, or until client is disappointed
You have to be there when it happens

2. Prospect Doesn’t Need One Until Something Happens
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They already have a Guy

3. Prospect Can Do It Themselves, Until It Gets Too Complex
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They rarely know when that is

4. They Can Use You Right Now
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Whatever’s in place now, probably needs improvement & updating
Opportunity is there, but it doesn’t occur to them that they need you
You have to be there when it does

5. There Are Many Professionals Who Do What You Do
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There’s a lot of competition

6. The Most Desirable Prospects Get Approached All the Time
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By all kinds of Advisors and Vendors
From all sides


There is another proven strategy:
A story is told that sometime in the 13th century, an army
tried to conquer a fortified city for 10 years with no
success.
During the final battle, the attackers retreated in their
ships and sailed away. One man was left abandoned,
sitting on the base of a huge statue they had built to
appease their gods.



Their reality:
• The business owns them
• If they lost their stake in the business, they’d lose
everything
• Upset about paying too much in taxes
• Their wealth is locked up inside of business
• Worried about how to motivate key EE’s without
giving away the business
• They get bombarded with sales approaches daily
• Too focused on growing their business to meet with
you


• 12M baby boomers own businesses
• 70% expected to change hands between 2020-2025
• With non-boomers, 14M owners need help getting
themselves and their $ out of the business in next
decade
• 69% of small biz owners expect that their company
value will be a source of retirement income*
*July 2010 Gallup pole of 604 small business owners with annual revenue<$20M
Robert Avery of Cornell University, 2006



Of current business owners:
• 40% plan to exit in the next 5 years
• 80% plan to exit within the next 15 years
• Eventually they all leave
UBS Financial Services, Inc., 9/16/2010



• All eggs in 1 basket… but blind to the risk
• Business is best investment… until it isn’t
• OK with personal piggy bank approach… but not your
suggestions
• Frustrated with illiquidity… but don’t want to diversify
• Letting you in to help is difficult at best



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Lead with your core services
At least you’re getting some business
Industry thinks this is normal
Delayed gratification financial caretaker model
• Stay close  He finally executes  You (finally) get paid



• Not everybody gets a liquidity event
• The “lucky few” who do, believe that now that they’ve
arrived, it is a good time to upgrade their advisors



• Only 20-25% of businesses for sale actually sell*
• 90% of those don’t get anywhere near what they
wanted/needed
• Shut the doors and walk away
• The “boots first” exit
*Jan 2007, The Complete Guide to Business Brokerage by Tom West
USB Financial Services, Inc., 9/16/2010



• Only 30% successfully transition to the next
generation
• 72% of private business owners have no continuity
plans
• 47% have no estate plans
• 55% of CEO’s retiring next year have NOT chosen a
successor
USB Financial Services, Inc., 9/16/2010



• Even if your clients are blessed to have a liquidity
event
• Really good chance they won’t get what they were
hoping for

But that’s NOT the worst part…



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Once they get in the big leagues, the game changes
They’ll feel bad, but…
Big paydays attract the big dogs to the beauty pageant
No longer about relationship…how good do you look
on paper



The Buy-Sell Problem Solver
A Turnkey Solution For Professionals Who Serve
Private Business Owners
A process to protect the business owner’s most valuable
financial asset…
Their stake in the business!



Helps owners
• Protect their largest asset from creditors and lawsuits
• Reduce taxes on business interest transfers and
current income
• Understand and leverage the financial value of their
business under a variety of circumstances
• Make sure the money is there when they need it



Helps advisors
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Get more referrals
Engage more business owner clients
Predictably increase revenues
Create more value and follow-on work



2-part system that creates leverage
1. 4-part analysis & deliverable
2. Turnkey client engagement system



• The Legal Audit
 To protect the business from creditors and lawsuits

• The Tax Minimizer
 To reduce taxes on business interest transfers and current
income

• The Value Identifier
 To understand and leverage the financial value of the
business

• The Funding Review
 To make sure the money is there when they need it



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Client Engagement Brochure
Client Focused Process Diagram
Drip marketing content
Case Studies
A Sample Review
Data Gathering Forms

All Tools Can Be Co-Branded



Let’s explore each section…



1. The Legal Audit
• 32-point legal review of buy-sell agreement
• ID’s critical issues typically missing from traditional
agreements
• Detailed analysis of how to fix problems ID’d
• Proactively avoids the “ticking time bomb” problem



“As a business and trust and estates attorney with a number of years in
practice, I have reviewed and redrafted many buy sell agreements. I have
also been exposed to other buy sell review products in the marketplace.
In my experience, the Buy Sell Problem Solver is a superior approach
because it systematically identifies critical issues that are missing from
most traditional agreements, while providing a level of detail and
analysis on how to address these issues that is unmatched in the
market.
Not properly addressing these issues now, before there is a problem, could
lead to potentially disastrous results for your business owner clients. I’m so
impressed with their framework that I’m using it to enhance the buy
sell agreements that I draft for my clients moving forward.”
Jessica Wojtowicz
Attorney


2. The Tax Minimizer
• ID’s tax problems for the business
• ID’s tax problems for the owners
• Provides creative solutions to reduce taxes now and in
the future



3. The Value Identifier
• ID’s an accurate range of values for planning purposes
• Highlights areas where future planning can be greatly
improved
• Provides opportunity for integrating personal and
business planning based on value and owner goals



4. The Funding Review
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Is strategy missing?
Out of date?
Able to survive real world stress tests?
Will the money end up where the owner intended?



Business Value

$5M

Annual Free Cash

$600,000

Growth of Free Cash

2%

Number of Partners

2

Partner 1 Ownership

50%

Partner 2 Ownership

50%

Buyout Price

$2.5M

Installment Sale (Years)

5

Interest

Non-specified in Buy Sell

Decrease Free Cash (Stress Test)

20%



Tax Impact To Cover Buyout
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
1

2
Pre-Tax Cost


3

4
After-Tax Cost


5

Cash Available for Surviving Owner
350,000
300,000
250,000
200,000
150,000
100,000
50,000
1

2

3

4

5

(50,000)
Cash Before Buy-out

Cash After Buy-out


Cash After Buy-out - Reduced Cash flow 20%


1.
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3.
4.
5.
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Buy-Sell Value Costs Owner $15M
Buyout Proceeds Withheld From Heirs
Buy-Sell Agreement Creates Tax Hit – For No Reason
Surviving Owner Forced to Overpay to Keep Business
Buyout Triggers Loan Acceleration
The Golden Goose Leaves and Takes The Eggs



2-part System that creates leverage
1. 4-part analysis & deliverable
2. Turnkey client engagement system



We want to help you get more business, but we
need your help!
1. Give us feedback from the field to improve offer/tools
2. Share what your clients/prospects have to say
3. Commit to 1 “test” engagement



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No charge to be part of program (at this time)
Significant discounts to our fees (for now)
Zero risk (for you and your clients)
Personal support in using tools to engage clients



• Flat fee of $2500 per client engagement (loss leader)
 4-part analysis
 Turnkey/Co-branded marketing system
• Zero risk money back guarantee
 No fine print, no questions asked
 If not 100% satisfied, we’ll refund the $2500
• 50/50 split of insurance commission (if any)



If you want to be part of our test group:
1. Email Greg Maddox at greg@ikvllc.com
2. Complete our short agreement & schedule strategy
session with Greg
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Greg will send you our short agreement for signature
Email signed agreement back to Greg

3. Receive sample materials & complete strategy session
with Greg
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Review materials
Answer questions
Co-Develop engagement strategy that works for you


715 Enterprise Drive
Oak Brook, IL 60523

(630) 596-5090


Q&A
For more information contact
Greg Maddox
Greg@ikvllc.com
847.269.4624

Thank You!
@InKnowVision
InKnowVision, LLC
InKnowVision
Google+

InKnowVision February 2014 Buy-Sell Problem Solver PPT

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InKnowVision February 2014 Buy-Sell Problem Solver PPT