Business Owners Must Think Like Investors

Business owners today are facing a perfect storm of controllable uncontrollable variables. But according to the Canadian Federation of Independent Business, 52% don’t know they need to take themselves out of harms way.

Think of the situation before Hurricaine Katrina: some people believed it was important to leave the New Orleans area, and some did not. Those that did not suffered and the rest of us were left wondering what it was that didn’t compel them leave New Orleans when they had the chance. Today, three years after Katrina, when the forecasters yell Hurricaine, the residents along the Gulf Coast don’t think twice, they go.

What’s going to galvanize business owners into getting ready to avoid the perfect storm?

The boomer bulge, born 1946 through 1962 will spend the next ten to fifteen years extracting their wealth out of the economy to put to other uses. Or I should say, attempting to extract their share of their company’s value. The only problem is, owners have not prepared their businesses so that they are attractive for investors to acquire them.

A perfect storm of influences will increase the supply of companies for sale right when the need is greatest for investors to buy them. The storm is manageable, but only if owners take preventive action now to be ready. It can take 2-3 years to put the company on a growth plan. It’s more than just slapping a coat of paint on and installing granite counters.

Here are the big clouds on the horizon for this perfect storm:

1. The economy is in a decline;

2. There are more than 1.7 million businesses in Canada. 50% are owned by boomers. 500,000 will want to sell. In any given year in Canada, roughly 25,000 businesses change hands.

3. Owners don’t like thinking about the day they won’t own the business

4. Owners don’t know who to talk to. It’s understandable that they don’t talk about it. They don’t want competitors or employees to find out they’re thinking of transitioning their ownership.

Business owners need to take heed and learn how to see their organizations through the eyes of an investor: get to know the key indicators they look for and make sure they are instilled throughout the company. Remember, an investor buys the future certainty of profitability, rather than the past. For every foggy indicator, the risk increases and so the price they are willing to pay decreases.

Spirit West CEO on Raymond James’ Radio Show “It’s Your Money”

Lorraine Rieger McGregor was interviewed by the “It’s Your Money” radio hosts, Raymond James’ Randy West and Gregg Collier for WLBE AM790.

 

Lorraine Rieger McGregor was interviewed by the “It’s Your Money” radio hosts, Raymond James’ Randy West and Gregg Collier for WLBE AM790.

The 25 minute show on how business owners can adequately prepare the business for the highest valuation focused on the fact that with the baby boomer boomer bulge nearing retirement, the number of businesses coming up for sale is set to increase by 100%.

This fact means those company owners wanting to sell or transition ownership will have to do a lot more than just “paint and install granite counters” to find an investor willing to buy them out or a lender able to bankroll a management buy out.

click the icon at the top of this article to play the radio show

Seminar – Frequently Asked Questions

The Seminar: How to Maximize Your Company’s Worth: The CEO’s Guide to Becoming Prepared for Investment

How is this seminar different than others on Selling your Business?

Succession planning you do for yourself. Valuation planning you must do for your business so that investors have certainty your company will be a profitable investment going forward. This seminar gives you an in depth analysis of how your business makes sense to an investor and where and why it might not give you the value you had hoped for. Wouldn’t you like to know how to be attractive to investors before you put your business on the market? For every element that is lacking in your company, the value of your business decreases. This seminar puts you in control of insider information that rarely gets shared with you until its too late to do anything about it.

Is this seminar about Succession Planning?

No. This seminar is about getting your business investor ready. It is what we call Valuation Planning. Succession planning is about getting you personally ready to retire. Take this seminar 2-3 years before you start thinking about retiring and you will retire profitably. Succession planning only gives you a limited perspective on how to get ready to retire. This seminar focuses on how investors will view your business.

What is Valuation Planning?

Getting what you want for your business is not easy. Investors have a very different perspective on value than you do. There is no multiple listing service of comparable companies to yours that helps an investor determine value. They look through a number of different ‘filters’ or ‘lenses’ looking for the key indicators that tell them this is a company that will make a return in the future. The more points of value that are obvious, the more an investor assigns to the valuation – the price they are willing to buy the company for or the amount they are willing to lend for a buyout. Valuation planning let’s you see your company through the eyes of an investor to determine where your operation may bleed value (and therefore the price you may be offered) and how you can remedy these ‘leaks’.

Why is this seminar limited to companies with revenue over $8 Million?

Most simply, our investor network is interested in businesses of this size. We work with investments bankers that help businesses get acquired by private equity or corporate investors. Large businesses have a lot more preparation work to become investor ready than smaller businesses.

What will I learn that I don’t already know?

At the end of the day, you will have an in depth self-assessment on how prepared your company is to be sold for its maximum valuation. You will know where your weak points are, why they are problematic and what you can do to change these elements to increase your company’s attractiveness to investors.

I want to attend but I don’t want people to think the company is for sale.

We only go on a first name basis during the seminar. We guard your registration information and do not share it with anyone outside of our firm. There is no attendee list available at the seminar and no “at the door registration” to protect your privacy. Talk as little or as much as you want during the day. The choice is yours.

Who can attend the seminar?

Company owners and their CFOs who have revenues of $8 million or greater in the last calendar year.

Will I have one-on-one time with the seminar speakers?

All our speakers and consultants will be available after the seminar at the reception.

What is your cancellation policy?

If we don’t hold the seminar on the advertised date and you cannot attend the re-scheduled date, we will refund your money in full or you may opt for one-on-one meeting to learn the same material from the workshop.

If you cancel:

15-30 days prior to the date of the seminar, 50% refunded or your fee can be applied to the next seminar.

14 days prior to the seminar, no refunds are given but your fee can be applied to the next seminar or a one-on-one meeting to learn the same material from the workshop.

Spirit West Management Launches Seminar Aimed at Baby Boomer Business Owners

FOR IMMEDIATE RELEASE

Spirit West Management Launches Seminar Aimed at Baby Boomer Business Owners -

Will they get what they think the company is worth when its time to cash out?

July 14th, 2008–

There are 17 million businesses in the US and 1.7 million in Canada according to Dun and Bradstreet. 50% of them are owned by Baby Boomers. 7 out of 10 of these owners will want to sell their business over the next 10 years, according to the Association for Mergers and Acquisitions Advisors. The supply of offerings will continue to grow substantially.

According to anecdotal evidence from investment bankers and private equity investors, business owners are unaware of the work that must be done to prepare to sell their company. They have unrealistic expectations and have not done the preparation necessary to reorganize the company so it can operate and grow under professional management.

To help baby boomers adequately prepare for the day they do want to sell to investors, employees or other companies, Spirit West Management is offering a one day workshop on how to restructure a company so that it is exactly what investors look for. “How to Maximize Your Company’s Worth: The CEO’s Guide to Becoming Prepared for Investment” will teach owners how to see their company through the eyes of investors and lenders.

“A company might be operating just fine under owner management, but will it continue to operate successfully when the owner leaves?” says Lorraine Rieger McGregor, CEO of Spirit West Management. “There are many hidden issues that an investor sees and for every one that doesn’t have a solution, the value of that company is reduced. It can be a very humbling experience for business owners to come to this time in their life and think that they can sell in the next six months. It just doesn’t happen like that. Restructuring can take 2 or 3 years depending on the issues we are dealing with. Owners need to take the time to get the right advisors and consultants to help them get prepared for this investment transition.”

The one day seminar, open to company owners that did at least $7 million in revenue last year, will be held March 19, 2009 at the EagleQuest Coyote Creek Golf Club in Surrey, BC. Owners will have the opportunity to get a reality check on the state of their business, hear from other owners who are selling or who have sold, meet private equity investors and strategic buyers as well as learn the ins and outs of the mergers and acquisitions process.

Read More Information on the seminar

For Contact:

Lorraine Rieger McGregor

Spirit West Management, Ltd
events@spiritwest.com or Tel: 604-306-7707

How to Maximize Your Company’s Worth – Seminar

Learn to see your company through the eyes of a future buyer, lender or investor, so you can maximize the value of your business?

It’s a buyers’ market for investors. Does your company stand out? Minimize the risk by preparing your company now. Learn the eight essential elements that if done now, will increase the value of your company when it’s time to transition ownership.

Meet with bankers, lawyers, tax specialists, growth consultants and investors to learn what you can do to increase your chances of getting growth loans, capital to help key managers buy you out, or how to position your company to be bought by another company or a private equity investor. This is an educational workshop, not a sales seminar.

It might only be a thought in the back of your mind now or high on your agenda, however you should know now how to achieve a profitable exit, buyout or obtain growth capital, by getting your company primed to be seen in its best light.

Is your company investor-ready?

To find out, you are invited to attend:

How to Maximize Your Company’s Worth:
The CEO’s Guide to Becoming Prepared for Investment

Thursday March 19th – Surrey, BC REGISTRATION NOW CLOSED

Seminar: 8:00 to 5:00 PM and Reception: 5-7 PM

For more information, please call the event hotline at     60…    OR email events@spiritwest.com

Ready to Change the Value of your Future?

Would you spend $395 today to learn how to increase the value of your company by 20% or 30%? This in depth seminar will show you how to reap the rewards of all your hard work so your business has a greater opportunity to get the value price you had always hoped for. This is Valuation Planning. It’s what you have to do first to prepare your company so you can actually achieve your growth and succession planning goals.

As a successful CEO you know first impressions are vital. What the private equity investor, banker or lender sees when they meet you and your company speaks volumes. Learn to see your company through their eyes. Why must you do this sooner rather than later?

• If you’re thinking of a change in ownership. It is becoming a buyer’s market for private equity and corporate investors. What does that mean for you? It means that over the next ten years, a staggering 8 million businesses will be put up for sale as baby boomers look to retire across North America. Many will not be able to find a buyer or an investor because they have not positioned their companies for obvious value. Don’t let your company get lost in the pack. Learn how to show value to investors so your company has immediate street appeal.
• If you’re thinking about growth capital. The economy has changed. Lenders have tightened their criteria. They want to see a history of profitability and a capable team able to execute some very sharp plans. In this economy you have to find recession-proof markets and deliver customer value or you’ll see declines in your profit margin too. Don’t let your company get caught in this economic noose. Learn how to build value points no matter what business you are in.

Join Spirit West Management, Deloitte, BMO Bank of Montreal and Miller Thomson LLP in Surrey on Thursday March 19, 2009.

Enjoy a confidential and fast paced day away from distractions as you learn with other CEO owners. Your day starts with breakfast, and includes private equity keynote speaker Grant Wallace from CopperLion Capital during lunch and an evening cash bar reception to give you time to privately consult with our team of M&A and business growth professionals.

Here are the secrets you will learn about to see how investor-ready your company is:
1. What aspects of your business will detract from your valuation;
2. How and where to make the most important improvements in your operation;
3. How a private equity investor and a corporate buyer view your company and either decides to pass or invest time in further due diligence;
4. How a lender assesses whether to give you capital for growth or not (you might need debt and leverage to get the sales pipeline investors look for);
5. How to change the way you lead and manage so that your company and your team is prepared for that investment and primed for growth;
6. How to ensure your legal issues are risk free and in order;
7. How to prepare yourself (and your future buyer) now for tax advantages later;

So why come?

At the end of this seminar, you will have in your hands a detailed self-assessment on how investor-ready your company really is. Why is this valuable? If you know what needs changing, you can build a plan which will increase the price an investor would be willing to pay and increase the chances you will be successful with lenders.

Attendance is limited to the CEO/owners of the first 50 companies with 2007 revenue greater than $10 million that sign up. To get the early bird individual rate of $395 register in one of four ways. More than one owner? Want to bring your CFO or partners? Register up to 3 people for the early bird rate of $595:

To Register, click here

For more information, please call the event hotline at     604-290-0880     OR email events@spiritwest.com

More questions? Look at our Frequently Asked Questions list here

Learn the secrets of what investors and lenders look for, before you want to sell. It could change your future by hundreds of thousands of dollars. Attend this seminar not only for your benefit, but for the benefit of your partners, employees as well as the stakeholders, suppliers and customers in your community that depend on your business. Your company deserves the best future it can get.

Sincerely,

Lorraine Rieger McGregor
CEO, Spirit West Management

Keynote Speakers

Grant Wallace
Vice President, CopperLion Capital part of the Washington Group of Companies

Robin Chakrabarti
Vice President, T&M Group, Owners of Boston Pizza and Mr. Lube

Sponsors and Speakers

Jeremy South
Partner, Deloitte

Ken Burnett
Partner, Miller Thomson LLP

Karen Dickson
Partner, Miller Thomson LLP

Dallas McMurtrie
Senior Tax Manager
Deloitte & Touche LLP

Paul Corcoran
Commercial Banking Area Manager
Bank of Montreal

David Lam
Vice President with the Deloitte & Touche Corporate Finance Inc
Vancouver

Lorraine Rieger McGregor
Spirit West Management

Rob McGregor
Spirit West Management

Areef Abraham
Spirit West Management