how to maximise the value of your business

How Maximise the Value of Your Business

HOW TO MAXIMISE THE VALUE OF YOUR

BUSINESSMisko Vujnovic, David Guest, Rob Jagger & John Riley


COMMON LEGAL TRAPS IN BUILDING YOUR BUSINESS

Misko Vujnovic


COMMON LEGAL TRAPS IN BUILDING YOUR BUSINESS(and how to avoid them)


COMMON LEGAL TRAPS IN BUILDING YOUR BUSINESS


BACKGROUND

• When do I start preparing my business for sale?

• Business name v Trademark• Is your business properly structured?• Documents, documents, documents• Making an effort now to sell better

tomorrow


WHEN DO I START PREPARING MY BUSINESS FOR SALE?

• Now• When everything goes well• Build up all the time• Steps outlined here make good

business sense even if you do not end up selling


BUSINESS NAME V TRADEMARK

• No business name • Unregistered business name – illegal and

punishable – nothing to transfer • registered business name – ASIC – no exclusive

right to use it – limited legal protection• Trademark– right to exclusive use• Trading name, business name, company name,

domain name


PROPER BUSINESS STRUCTURE

• Sole-trader

• Partnership

• Company

• Trust


DOCUMENTS, DOCUMENTS, DOCUMENTS

• Do you need them?

• Do you know where they are?

• Do you understand them?


DOCUMENTS, DOCUMENTS, DOCUMENTS

NO PROPER DOCUMENTS - WHAT CAN HAPPEN

• No lease • No shareholders agreement• No trust deed


MAKING THE EFFORT NOW TO SELL BETTER TOMORROW

• Business structure too complicated ?• Mixed personal assets and business assets?• Accounts and financial records in good order?• Can the business survive without you? • Are long term important customer or supplier

agreements in place?• Is your business exposed to any unusual or significant

risks or liabilities?• Are any licences required and can they be transferred?


OFFER TODAY

1 hour legal health check of your business and personal legal requirements


HOW TO PUT YOUR BUSINESS ON AUTOPILOT

David Guest


Your Presenter David Guest• 25 Years Sales Experience

• Read over 263 books on sales, marketing, business, psychology.

• Invested over $748,000 in my own business education

• 15 Years coaching

• Multi-global awards• Client Results

• Program Development

• Marketing

• PresentingWINNER

Global Marketing Coach 2012


Definition of a REAL business…

Commercial,Profitable, EnterpriseThat Works

Without YOU!


Operations

Admin Sales & M’kting

YOU

Many businesses I see look like this…..

Operations

Admin Sales&

Marketing

YOU The ideal performing business looks more like this……

Which is your business…?


Six Steps to Massive Results…MASSIVE RESULTS

Results

TeamLeverage

NicheMastery From Chaos to

Control

Predictable Cash Flow

Systematize for Efficiency

Structure for Growth

Well Oiled Machine

Multiplication or Acquisition

Stability

Synergy

Cash

Time

Happiness

Freedom

Diversification


Quoting Richard Branson ...

“If you can learn to run one business successfully, then there is no reason you can’t run any number of businesses at the same time….the principles are still the same.”


Insanity…

Doing the same thing over and over again and expecting different results. Albert Einstein


Quoting Jim Rohn ...

“Never wish your life were easier ... Wish that YOU were better…”


MAXIMISING VALUE THROUGH BUSINESS EXIT PLANNING

Rob Jagger


My Business experience 25 years of broad business experience 15 years of optimising and restructuring businesses Established Exit To Success Consulting to provide a holistic succession

planning offering

Who Am I ?

My Why !


Drivers of Business Value


Drivers of Business Value – Financial Performance


Drivers of Business Value – Growth Potential


Drivers of Business Value – Over Reliance Risk


Drivers of Business Value – Cash Flow


Drivers of Business Value – Future Recurring Revenue


Drivers of Business Value – Business Differentiation


Drivers of Business Value – Customer Satisfaction


Drivers of Business Value – Key Person Risk


When is the best time to sell?


Business exits are difficult! Reasons why include:

75% of business owners do not have a business exit plan.

52% of business owners are relying heavily on the sale of their business to fund retirement.

Note - 80% of businesses do not sell as they not structured to attract potential buyers.

Source: Aust. Centre For Family Business at Bond University


Exit Planning – What is it?Exit Planning is an integrated approach that addresses all

the issues that business owners face in a business exit.


The Exit Planning Process


Exit Planning Pays Off…


Win / Win ResultExit planning makes the sale of your business a win/win result.

This is achieved by ensuring: You receive a fair price for your years of hard work building the business.

The buyer gets a great business, it’s customer base and it’s reputation in the community.


Today’s Offer for Breakfast Attendees Only

Do you think your business is a valuable asset at the moment?

Can your business give you the lifestyle you deserve?

I can help with support through the Value Builder System. With a full month’s support to check your performance against the key drivers of business value and turn your business into a more valuable asset….. And it’s complimentary.

If you like me to help, just tick the Value Builder System request on the feedback form. (normally valued at $800).

Complimentary support through the Value Builder System


JLR PARTNERS – Accounting & Financial Planning Services

…PLANNING FOR YOU TO PROSPER

SELLING YOUR BUSINESS WITH

ZERO TAX




About me

Graduated in 1993 – Bachelor of Business – Accounting

RN Black & Co. – Mansfield 1994 to 1998

Completed CPA qualifications in 1998

Concepts & Results – 1998 to 2004

Formed JLR Partners in 2004

Diploma of Financial Planning – 2007


Small Business Tax Concessions When

Selling Your Business


Capital Gain TaxApplies to –• Sale of shares in a company• Sale of units in a unit trust• Sale of goodwill• Sale of licences• Sale of land and buildings• Contractual rights• Leases


The Small Business 15 year Exemption


The Small Business 50% Active Asset Reduction


The Small Business Retirement Exemption


The Small Business Rollover


Are You Eligible For The Small Business Capital Gains Tax Concession?


One – You are a small business entity with a turnover of less than $2M

Two – The asset you are selling must be an “Active Asset”

Three – The maximum net asset value test


Key Learning Points• Structure your business properly

• Determine what you are selling

• Plan at least 5 years in advance for your business sale


Case StudyWally is 49 years old and owns a engineering business. He is sole director and shareholder of the company Big Steel Pty Ltd. He has run the company for 12 years. The business has steadily grown. Turnover is around $1.5M and he employs 5 staff. After 12 years of hard work, working up to 70 hours a week he wants sell the business and spend 12 months travelling around Australia with his family. He has been offered $2.2M for the business. This price includes the goodwill and plant and equipment of the business.


Scenario OneWally's company Big Steel Pty Ltd sells the plant, equipment and goodwill for $2.4M. The company applies the small business 50% active asset reduction and includes a taxable capital gain of $1.2M in its tax return. The company pays $360,000 in company tax on the disposal of the business.


Scenario TwoWally's company Big Steel Pty Ltd sells the plant, equipment and goodwill for $2.4M. The company applies the small business 50% active asset reduction and on advice from his accountant he chooses to apply small business retirement exemption by contributing $500,000 to his self managed superannuation fund. The taxable capital gain in Big Steel Pty Ltd is $700,000 –

Sale price $2.4MLess active asset reduction $1.2M

Assessable capital gain $1.2MLess small bus. Retirement exemption $0.5M

Taxable amount $0.7M Company tax payable would be $210,000.


Scenario ThreeInstead of Wally selling the assets in his company he negotiates to sell his shares in the company. This allows Wally to apply the 50% general CGT discount as well as the 50% active asset reduction. He can also again use the small business retirement exemption.


Scenario Three ctdSale price $2.4MLess 50% general CGT discount $1.2MLess active asset reduction $0.6M

Assessable capital gain $0.6MLess small bus. Retirement exemption $0.5M

Taxable amount $0.1M

Assuming Wally pays tax at the top marginal rate he would pay just $46,500 in tax


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