Sheet Metal & Air Conditioning Contractors’ National Association

Archives

Recap of SMACNA’s Planning Your Exit and Business Valuation Program

Sep 19, 2019

Lamar Rutherford 398x440Twenty-eight SMACNA members from across the nation recently traveled to Seattle, WA to take part in SMACNA’s inaugural Planning Your Exit and Business Valuation Program. The program was led by John Ovrom and Lamar Rutherford of Exit Consulting Group.

This highly informative two-day program began with a meet and greet reception, allowing attendees to meet with the instructors and mentors prior to the start of the program.

The first day’s morning session was devoted to business readiness. Mrs. Rutherford led a discussion on common mistakes current owners make when planning to sell their business. Attendees learned how these common mistakes can impact a company’s value and how they are time consuming when preparing to sell.

John Ovrom led a discussion on evaluating assessment areas involved with selling a business. These categories included: planning, leadership, sales, marketing, people, operations, finance, and legal/IP. Mr. Ovrom emphasized the more technology you have invested in, the more valuable your business.

Succession Planning Program 400x250

On Monday afternoon, Ovrom discussed common ownership readiness issues and how they can impact the value of a business. Issues to consider include defining the win for each owner, timing, financial ability and emotional readiness.

Attendees enjoyed a networking reception and panel discussion on Monday evening. The panelists included four SMACNA contractors (mentors) that already went through the succession process. The mentors shared their experiences with successes, failures, best practices, and lessons learned during their exiting process.

On the second day, Mr. Ovrom discussed market readiness with regard to family owned vs. professionally owned vs. family/professionally owned.  The participants discussed the strengths, weaknesses, opportunities and threats to consider when determining market readiness. Ovrom also discussed the different types of buyers. These included inside buyers (family or management) and outside buyers.

Rutherford then discussed detailed steps to determine the valuation of a business. These steps include EBITDA calculations and after-tax calculations (sales price and transactions costs). She then discussed what should be included in the Term Sheet, i.e. agreed upon pricing, funding, consultant agreement, asset/liabilities list, contingencies and fees/expenses.

The program concluded with complimentary one-on-one appointments for attendees to meet with Mr. Ovrom or Mrs. Rutherford to begin development of their personalized succession plan.

The program was extremely well received and will be held once again in 2020.

For information on the 2020 Planning Your Exit and Business Valuation Program, please contact Bridgette Bienacker at bbienacker@smacna.org.