(CLP) Programs

Appleton Greene corporate training programs are all process-driven. They are used as vehicles to implement tangible business processes within clients’ organizations, together with training, support and facilitation during the use of these processes. Corporate training programs are therefore implemented over a sustainable period of time, that is to say, between 1 year (incorporating 12 monthly workshops), and 4 years (incorporating 48 monthly workshops). Your program information guide will specify how long each program takes to complete. Each monthly workshop takes 6 hours to implement and can be undertaken either on the client’s premises, an Appleton Greene serviced office, or online via the internet. This enables clients to implement each part of their business process, before moving onto the next stage of the program and enables employees to plan their study time around their current work commitments. The result is far greater program benefit, over a more sustainable period of time and a significantly improved return on investment.

Appleton Greene uses standard and bespoke corporate training programs as vessels to transfer business process improvement knowledge into the heart of our clients’ organizations. Each individual program focuses upon the implementation of a specific business process, which enables clients to easily quantify their return on investment. There are hundreds of established Appleton Greene corporate training products now available to clients within customer services, e-business, finance, globalization, human resources, information technology, legal, management, marketing and production. It does not matter whether a client’s employees are located within one office, or an unlimited number of international offices, we can still bring them together to learn and implement specific business processes collectively. Our approach to global localization enables us to provide clients with a truly international service with that all important personal touch. Appleton Greene corporate training programs can be provided virtually or locally and they are all unique in that they individually focus upon a specific business function. All (CLP) programs are implemented over a sustainable period of time, usually between 1-4 years, incorporating 12-48 monthly workshops and professional support is consistently provided during this time by qualified learning providers and where appropriate, by Accredited Consultants.

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Executive summary

Building Equity Value

Background

Whether the owners of a business want to transfer to family members, to their employees and management, or simply are looking to sell, many exit options provide limited returns for the current ownership at the time of transfer. Most businesses are built as lifestyle businesses, built to support the owners lifestyle, but expect the business to be worth the same as businesses that have been built to create equity value. This course aims to inform Owners and other leaders in private businesses how to transition from lifestyle to creating equity value. This course is aimed at those that want to create a business of value and a business that is ready to be transferred to the new owners whether that is through internal transfer, to family members, or sale to a third party. This course should be attended by Business Owners, and private Leaders / Business Management.

According to surveys and information provided by the M&A profession in terms of those businesses that go to market, only 30% – 40% of businesses with revenues above $10 million sell, with only 20% of smaller businesses sell. The business is often the owner’s life work, their main income source. It is often between 60% and 90% of their wealth, and any transfer is expected to fund their retirement. There are several reasons why businesses don’t sell: the business is overpriced, its relative value cannot be demonstrated, the value is dependent on the owner’s specific skills or knowledge, or possibly fundamental flaws in the business model or infrastructure.

Lifestyle organizations can be transformed into equity value creators if the owner and management team are prepared to make the necessary changes whether they are planning to transfer to family, employees and management, or hope to sell.

There are multiple forms of valuation for specific purposes such as tax filing, gifting, selling equity to a key employee. Looking at the business from both a financial and strategic buyers perspective gives a measure of a business’ health and sustainability. Independent of the current owner’s succession plans, this course helps business owners, its leaders, and managers to understand what drives an organizations sustainable health (equity value), what doesn’t, and what specifically drives down the value. Why some businesses are more desirable to buyers as well what is required to ensure that the business is transition ready and its value drivers understood and can be demonstrated.

Organizations typically enroll on this course for the following reasons:

• They want to know what drives the valuation multiple and how to maximize the business’ value.

• They want to understand ways to de-risk the economic sustainability of their business.

• They have had a failed M&A deal and want to know why.

• They want to reduce the chances of leaving money on the table from M&A activities.

• They want to be fully informed and prepared ahead of a future deal.

• They want to understand buyer’s perspective.

• They want to reduce the risk of not being able to find a future buyer.

• They want to know what makes a business attractive or not to buyers.

The structure of a deal has much to do with how well prepared the organization is to operate without the owners pulling the strings. Many organizations have been wooed by buyers with a fantastic price on paper, only for the terms to feel oppressive because the business wasn’t ready, or the buyers pull their deal at the last minute because they discover more operational risk than expected.

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Valuation Scale

There are several ways to value a business that focus on specific needs and size. Main Street businesses have a valuation linked to an owner’s discretionary earnings. Often Fair Market Value is used as a hypothetical value that is the form that many governments favor. For new innovations often a Discounted Cash Flow is used. If the business is looking to be sold to a Financial or a Strategic buyer, the valuation often follows the format of Adjusted Profit or Income Multiplied by a Multiple, referred to as:

V = P x M

This is a measure of the value and expected income impact in the eye of the buyer also known as the business’ ability to be sustainable and thrive.

Figure A. below shows how the value ranges for companies in the same industry with the same income. This is driven by quality and buyer readiness of the business to be transitioned to new owners. The Industry Benchmark (Average) is subject to go up and down depending on the economic cycle and availability and price of capital – for example in high interest rates the Industry Benchmark goes down as it does in a recession or economic uncertainty.

Figure A. Range of value of a business from the Buyers Perspective

[Alt a vertical scale of value at the bottom being a distressed business, the lower middle being lifestyle and owner reliant. The middle is the average or benchmark, above the middle are businesses that are businesses that are building the assets that drive future revenues and at the top the most valuable businesses are those that are scalable and have the capability to continue scaling]

The typical risk profile of a founder tends to be higher than that of a future buyer, after all, without the willingness of the founder to roll the dice and m