The Essential First Step Using business valuations to uncover insurance needs

“The journey of a thousand miles begins with one step.” -Lao Tzu

For Producer Use Only. Not For Public Distribution Active M & A Market *abfJournal, July/August 2015, Joe Nuzzolo & Bill Welnhofer, U.S. and Global M & A – Credit Markets Fueling Demand

For Producer Use Only. Not For Public Distribution Succession Planning Disconnect Source: James T. Scanlon, “Sizing Up Small Business Owners: Product Ownership Trends.” LIMRA, 2015

For Producer Use Only. Not For Public Distribution Common Concerns Develop a personal exit strategy Develop a succession strategy for the business Develop a strategy for business expansion Manage and improve capital and cash flow Minimize personal and corporate taxes Identify capital sources to maintain or expand the business Assistance in positioning the company for sale

For Producer Use Only. Not For Public Distribution Considered a Courtesy Calculation of Value?

For Producer Use Only. Not For Public Distribution * Valuing a Business, 5 th Edition, Shannon P. Pratt val-u-a-tion (noun) a process for calculating the monetary value of an asset. Valuation is subjective and often results in wide disparities for the perceived values of most assets. Most business valuations that are performed have the potential for a legal challenge. Courts like to have professionally accepted standards to rely on for guidance in deciding disputed issues.*

For Producer Use Only. Not For Public Distribution A Case Study John Campbell Business Owner| 60 years old Married to Martha Campbell Three adult children Approaching retirement Not sure what his business is worth Interested in 3 rd party buyers No succession plan

For Producer Use Only. Not For Public Distribution Why Marshall & Stevens? Quality Valuation Full Range of Industry Experience Speed & Flexibility Fair Value Analysis Independence Integrity

For Producer Use Only. Not For Public Distribution The Age Wave *abfJournal, July/August 2015, Joe Nuzzolo & Bill Welnhofer, U.S. and Global M & A – Credit Markets Fueling Demand There were 75 million baby boomers as of ,000 baby boomers turn 65 every day until Over 500,000 businesses will exchange hands annually. An estimated 8 million business owners exiting.

For Producer Use Only. Not For Public Distribution Opportunities The average affluent business owner has at least $500,000 in assets to invest excluding real estate and business interests AND business assets are only 25% of their new worth.* *James Mitchel, “Affluent Small Business Owners: Lots of Opportunity.” LIMRA MarketFacts (Spring 2009); A quarter of small business owners do not own life insurance; an increase of 6% since Executive life market penetration is 22%, an increase of 7% since 2008.

For Producer Use Only. Not For Public Distribution Business Valuation Simplified Identify the candidate Contact ASC for Indicator of Value Questionnaire Submit Questionnaire along with three years of company financials (i.e., balance sheet, income statement & statement of cash flow) Marshall & Stevens conducts valuation Marshall & Stevens provides results

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For Producer Use Only. Not For Public Distribution Pursuant to IRS Circular 230, MetLife is providing you with the following notification: The information contained in this document is not intended to (and cannot) be used by anyone to avoid IRS penalties. This document supports the promotion and marketing of insurance products. You should seek advice based on your particular circumstances from an independent tax advisor. MetLife, its agents, and representatives may not give legal or tax advice. Any discussion of taxes herein or related to this document is for general information purposes only and does not purport to be complete or cover every situation. Tax law is subject to interpretation and legislative change. Tax results and the appropriateness of any product for any specific taxpayer may vary depending on the facts and circumstances. You should consult with and rely on your own independent legal and tax advisors regarding your particular set of facts and circumstances. MetLife Insurance Company USA North Community House Road Charlotte, NC CS BDRM © 2016 METLIFE, INC. L [exp1216][All States][DC,GU,MP,PR,VI]