1. Value Drivers & Best Buyers Jeff Kraai, President Exit Strategies, Inc. Copyright © 2012 By Exit Strategies, Inc.

2. Personal Snapshot Copyright © 2012 By Exit Strategies, Inc. “Personal Snapshot” Home- Vancouver, WA Heart is in- Montana Married- Laurie / Interior Designer Best Dog- Dachshunds Favorite Meal- Thai Food Top Vacation- Southern Caribbean Attitude- Hard work creates luck! Favorite Movie- Breakfast Club Hobbies- Bicycling, Backpacking Proud of- Perfect Service (try me) Weaknesses- Pens Lacking- Patience (and hair) Strengths- Committed to Success Most enjoy- Closing Deals! Best Quote- “In this life you don’t get what’s fair…. you get what you negotiate for.” -Unknown

3. ‘Transition’ Transfer All or Part of Company: Family Member Key Employee Partner Competitor Strategic Buyer Investment Buyer (Third Party) Private Equity Group (PEG) Overall Process is an “Exit Strategy” Copyright © 2012 By Exit Strategies, Inc.

4. Key Questions Timing Business Value Sales Price vs. Yield Wealth Preservation Deal Structure / Taxes Confidentiality Copyright © 2012 By Exit Strategies, Inc.

5. Key Questions Premise Lease / Real Estate Key Employees Best Buyers / Competitors Training & Consulting Period Sales Process Who Should Help / Fees Copyright © 2012 By Exit Strategies, Inc.

6. Business Value Numbers = Appraisal Numbers + Story = Transaction Value (Valuation) (Analysis) Copyright © 2012 By Exit Strategies, Inc.

7. Preparation: “Value Drivers” ① Timing Personal / Business / Market ② Financial Trends ③ Owner Involvement ④ Management Quality ⑤ Client Risk Factors Copyright © 2012 By Exit Strategies, Inc.

8. Preparation: “Value Drivers” ⑥ Asset Quality ⑦ Reputation / History ⑧ Financial Cleanliness ⑨ Professionalism Systems & Procedures ⑩ Competition / How Fit Copyright © 2012 By Exit Strategies, Inc.

9. Business Value: “Example” Company “A” vs. Company “B” ‘Numbers Only’ Valuation = $2,750,000 $2,750,000 Timing- Ready Not Ready Financial Trend- Upward Downward Owner Involvement- 25-30 hrs./wk 65-80 hrs./wk Management Quality- 3 Mgrs ~ 8 yrs. 3 Mgrs ~ 9 mos. Client Risk Factors- 50%/6 Co’s/14 Adj. 50%/2 Co’s/3 Adj. Asset Quality- 18 Veh. ~ 6 yrs. old 18 Veh. ~ 14 yrs. old Professionalism- Sys. & Procedures No Sys. & Procedures Reputation / History- Solid Weak Financial Cleanliness- Clean Dirty Competition / How Fit- Strong Weak Range of Value: $2.9 - 3.1M $2.0 -2.4M Copyright © 2012 By Exit Strategies, Inc.

10. Summary: “Value Drivers” ① Timing ② Financial Trends ③ Owner Involvement ④ Management Quality ⑤ Client Risk Factors Copyright © 2012 By Exit Strategies, Inc. ⑥ Asset Quality ⑦ Reputation / History ⑧ Financial Cleanliness ⑨ Professionalism ⑩ Competition / How Fit

11. Questions ? Confidential at: Office: 1.800.388.1096 Cell: 1.503.577.5649 Info@ExitStrategies-DR.com Copyright © 2012 By Exit Strategies, Inc.

12. Types of Buyers What Determines? Size / Gross Sales Profitability- (Adjusted Earnings / EBITDA) Types of Buyers? Family Member Key Employee Partner Competitor Strategic Buyer Investment Buyer (Third Party) Private Equity Group (PEG) Copyright © 2012 By Exit Strategies, Inc.

13. Buyers & Deal Structures Financeable vs. Non-Financeable Deal Structure Variables Cash Seller Carry-Back Notes Earnouts Compensation Package Consulting Fees Benefits Retain Partial Ownership (Stock / Recap.) Copyright © 2012 By Exit Strategies, Inc.

14. Locating Buyers Where? General Business Brokerage Websites Industry Websites Industry Publications- R&R, Cleanfax, C&R, etc. Newspapers- Local, Regional or National Direct Mail How? (Very confidentially.) Generic Ad Executive Summary, NDA, Resume, PFS Qualify Financially & Otherwise Approval by Seller Copyright © 2012 By Exit Strategies, Inc.

15. Transition Team Transition Team Maximize Yield Minimize Risk Financial Legal Emotional You & $ AttorneyCPA Wealth Advisor Estate Planning Attorney Broker Copyright © 2012 By Exit Strategies, Inc.

16. Thank You ! Confidential at: Office: 1.800.388.1096 Cell: 1.503.577.5649 Info@ExitStrategies-dr.com Copyright © 2012 By Exit Strategies, Inc.